Investment decisions in financial markets are fundamentally guided by rational choice frameworks, where both individual investors and institutional fund managers act under the influence of market signals, risk perception and expected utility. Mutual funds, as a prominent investment vehicle for retail and institutional investors, serve as intermediaries between consumer choice and producer (fund managers) strategy. In an era marked by heightened market volatility and information asymmetry, investment decisions are increasingly shaped by rational expectations and behavioural responses to market signals. This study investigates the co-movement dynamics between mutual fund returns and their corresponding underlying indices of the National Stock Exchange (NSE) of India, emphasizing how such relationships influence the rational choices of both individual investors (consumers) and fund managers (producers of investment portfolios). Utilizing advanced time-series econometric techniques, including the cointegration test, vector error correction model (VECM) and Granger causality analysis, the study evaluates whether mutual funds align with the indexes of NSE in a manner that reflects market efficiency and rational fund allocation. The findings reveal significant short-run and long-run dependencies, suggesting that fund managers’ strategic decisions are closely tethered to index movements, which in turn affect investor confidence and choice under uncertainty. This research contributes to the broader discourse on decision-making under risk by highlighting how the perceived stability and predictability of benchmark indices guide mutual fund flows. It also raises critical questions about whether such co-movements indicate informed investment choice or passive index mimicry, thereby offering new insights into consumer investment behaviour in India’s mutual fund ecosystem. The study underscores the implications for rational asset allocation, portfolio diversification and the role of informational efficiency in financial decision-making. JEL Classifications: D72, D74, H1, H4, H7
This paper extends the literature on spatial price–quality competition by looking into the welfare impact of increased consumer heterogeneity. This is done by incorporating consumer heterogeneity into a model where firms compete simultaneously in price and quality within a circular market framework. Consumers are assumed to have either high or low willingness to pay for quality, thereby capturing both vertical and horizontal product differentiation in the model. The analysis establishes that as consumer heterogeneity increases, welfare for low-preference consumers follows an inverted-U pattern. Initially, greater heterogeneity enhances welfare by inducing firms to offer higher-quality products at higher prices. However, beyond a threshold, rising production costs and hence, price increases outweigh these benefits, leading to reduced welfare and access to the market for consumers with a low preference for quality. This finding highlights a crucial trade-off between quality improvement and affordability, and hence, in market access. This offers an important insight into framing policies that aim to promote inclusive market access and maintain balanced quality competition. JEL Classifications: D21, D62, I31, D49
This study examines how financialization affects the investment behaviour of firms in Türkiye’s cement industry, a capital-intensive sector that is crucial for construction, infrastructure and industrial development. The analysis uses firm-level panel data for 10 publicly listed cement companies over the period 2008–2016. This time frame is chosen because consistent data on interest payments and financial items are available from 2008 onwards, while major mergers in 2017 significantly reduced firm-level data continuity thereafter. To capture both real and financial dimensions of investment, the study incorporates non-financial determinants (investment rate, capacity utilization and operating profit) alongside financial indicators (financial profit rate, borrowing cost, financial asset ratio and debt ratio). The investment rate is measured as capital expenditures relative to capital stock, while utilization is proxied by sales over capital stock. Given the dynamic nature of investment and potential endogeneity, the difference generalized method of moments estimator is employed to control for firm-specific effects, persistence and reverse causality. The results show strong investment persistence and a significant accelerator effect of capacity utilization. While operating profit is insignificant, financial profit and financial asset holdings positively affect investment, suggesting that financial income and liquidity buffers can support real investment. Debt has a negative but insignificant effect. Overall, the findings indicate that financialization exerts dual effects—reshaping firms’ financial strategies while also providing liquidity that can facilitate productive investment in an emerging market context. JEL Classifications: G32, L61, E22
While empirical and conceptual studies highlight the interdependence of hospitals and allied firms in medical-tourism destinations, few offer theoretical models capturing this dimension. This study develops a model featuring two interdependent sectors: hospitals providing medical care and allied-firms offering complementary services (e.g., accommodation, food, transport) that support the stay of patients and their companions in the destination. We examine two market structures: a monopoly hospital providing homogeneous service quality and a vertically differentiated duopoly comprising high-quality and low-quality hospitals. Each structure is analyzed under two institutional settings: non-coordination, where hospitals independently set service-quality to maximize their own profits; and coordination, where a central planning-authority chooses quality levels to maximize joint sectoral profit. Results show a trade-off—coordination improves accessibility and allied-sector profits through lower medical service quality and prices, while non-coordination yields higher medical-service quality and greater profits for the hospital-sector but reduces demand and profitability of the allied-sector. Sensitivity analysis suggests that widening income-dispersion improves medical service-quality under monopoly, but may lower the quality levels under duopoly if the high-end hospital’s initial quality is sufficiently high. JEL Classifications: D42, D43, L83, Z320
An empirical investigation has been conducted in the present study to observe the climate-economy interactions of Indian states and Union Territories from various dimensions over the period from January 2010 to December 2023. Thus, monthly average precipitation and temperature have been taken into consideration as climate variables, and the average gross state domestic product (GSDP) as the economic variable. For empirical inference, multiple regression equations and panel regression equations have been developed and estimated. Precipitation has a significant positive impact on average regional GSDP, whereas the North-East region has shown a significant negative temperature shock. Moreover, the seasonal precipitation shock has a stronger effect on the regional average GSDP compared to temperature. Additionally, panel estimation has revealed that both temperature and precipitation have a significant adverse effect on average seasonal GSDP. JEL Classifications: Q54, Q56, Q58, C21
