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CHEMICAL INDUSTRYPlant and Machinery

In Adding model, Stock of Net Liquidity as a variable is found to be significant at 5% level in 17 estimated equations and at 10% level in three equations in seven firms like, Monsanto Chemicals of India Ltd., Pidilite Industries Ltd. et cetera. When the aggregate of sample firms is taken as a whole, in Adding model it appears to be significant in two equations at 5% level and in only one equation it is significant at 10% level out of eight estimated equations.

When the investment in Plant and Machinery as a dependent variable is studied, the independent variable that is Stock of Net Liquidity is found to be significant in three estimated equations at 5% level and in one equation it is found to be significant at 10% level in four companies like, Monsanto Chemicals of India Ltd., Nicholas Piramil India Ltd., Pidilite Industries Ltd. et cetera under Constant model. When the equations under Constant model are tested at the aggregate of firms level in Chemical Industry, this particular variable appears to be significant at 5% level in only one equation out of a total of six estimated equations. This particular independent variable in Elimination model, is found to be significant at 5% level in 19 equations and in seven equations at 10% level in 10 firms like, BASF India Ltd., Colour Chem Ltd., Excel Industries Ltd., Glaxo India Ltd., Monsanto Chemicals of India Ltd., Pidilite Industries Ltd. et cetera. Considering the sample firms’ aggregate level in the Chemical Industry as a whole, its level of significance in all the three estimated equations is 5% under Elimination model.

In 20 equations of Monsanto Chemicals of India Ltd. and Pidilite Industries Ltd., Stock of Net Liquidity has shown an impact at 5% or 10% level of significance under Adding & Constant & Elimination models. In Bayer (India) Ltd., Indian Oil Corporation Ltd. and Zandu Pharmaceutical Works Ltd. it is found to be significant in nine equations under Adding and Elimination models. In Cipla Ltd., Clariant (India) Ltd., Gujarat Narmada Valley Fert, Co. Ltd. Gujarat State Fert and Chemicals Ltd., Indian Petro Chemicals Corporation Ltd., Madras Refineries Ltd., Parke Davis (India) Ltd. and Rhone-Poulenc (India) Ltd., it is found to be not significant in any of the equations under Adding model or Constant model or Elimination model. In 13 equations it is found to be significant under Elimination model only in companies like, BASF India Ltd., Colour Chem Ltd., Excel Industries Ltd., Glaxo India Ltd. and Tata Chemicals Ltd. In Cheminar Drugs Ltd. and Nicholas Piramal India Ltd., in eight equations this variable is found to be significant under Adding and Constant models. In 10 firms out of a total of 20 firms it appears to be significant in most of the equations under Elimination model.

Y1- Gross Block

From the table (4), it can be seen that, in Adding model in seven companies like, Glaxo India Ltd., Monsanto Chemicals of India Ltd., Tata Chemicals Ltd. et cetera in nine estimated equations Dividends as an independent variable appears to be significant at 5% level and in five equations at 10% level. Taking the sample firms’ aggregate level Dividends are found to be not significant in any of the equations under Adding model. When the investment in Gross Block as a dependent variable is studied, the independent variable that is, Dividends appears to be significant at 5% level in one equation and at 10% level in two equations in three firms like, Excel Industries Ltd., Gujarat Narmada Valley Fert. Co. Ltd., Pidilite Industries Ltd. et cetera under Constant model. In the aggregate of sample firms in the Chemical Industry as a whole, Dividends as an independent variable is found to be not significant in any of the equations under Constant model.

Dividends shows an impact on investment in Gross Block in 14 equations at 5% level of significance and in seven equations at 10% significance level in 10 companies like, Excel Industries Ltd., Gujarat State Fert & Chemicals Ltd, Nicholas Piramil Ltd. et cetera under Elimination model. Considering the Chemical Industry as a whole, this particular variable appears to be not significant at 5% level or 10% level in any of the equations under Elimination model.

In six equations, Dividends as a variable is found to be significant at either 5% or 10% level under Adding, Constant & Elimination models in Excel Industries Ltd. In Glaxo India Ltd., Gujarat State Fert & Chemicals Ltd., Monsanto Chemicals of India Ltd., Nicholas Piramal India Ltd. and Tata Chemicals Ltd., in 21 equations Dividends as a variable is found to be significant under Adding and Elimination models. In BASF India Ltd., Clariant (India) Ltd. and Zandu Pharmaceutical Works Ltd., in six equations it appears to be significant under Elimination model only. In Cheminar drugs Ltd., in only one equation it is significant under Adding model only. In Gujarat Narmada Valley Fert. Co. Ltd. in one equation it is significant under Constant model only. It appears to be not significant in any of the equations under Adding model or Constant model or Elimination model in companies like, Bayer (India) Ltd., Cipla Ltd., Colour Chem Ltd., Indian Oil Corporation Ltd.,

Indian Petro Chemicals Corporation Ltd., Madras Refineries Ltd., Parke Davis (India) Ltd. and Rhone-Poulenc (India) Ltd. In Pidilite industries Ltd., in three equations it is significant under Constant and Elimination models. In 10 firms out of a total of 20 firms in most of the equations Dividends is found to be significant under Elimination model.

Y2-Plant and Machinery

Dividends as an independent variable shows an impact on investment in Plant and Machinery. Its level of significance is 5% in five estimated equations and 10% level in three equations in six firms like, Excel Industries Ltd., Glaxo India Ltd., Indian Oil Corporation Ltd. et cetera under Adding Model. When the aggregate of sample firm is taken as a whole, it is found to be significant at 5% level in only one equation under Adding model out of eight estimated equations.

When the influence of Dividends as an independent variable is tested on Plant and Machinery as a dependent variable under Constant model, it is found to be significant in one equation at 5% level and at 10% level in one equation only in two firms namely, Excel Industries Ltd. and Gujarat Narmada Valley Fert. Co. Ltd. Considering the sample firms’ aggregate level it is found to be not significant in any of the equations under Constant model.

In Elimination model, Dividends as a variable appears to be significant at 5% level in 18 estimated equations and at 10% level in nine equations in 13 companies like, BASF India Ltd., Bayer (India) Ltd., Cheminar Drugs Ltd., Excel Industries Ltd., Glaxo India Ltd., Nicholas Piramil India Ltd. et cetera. When the equations under the Elimination model are tested at the aggregate of firms level in Chemical Industry, this particular variable has shown impact at 5% level in all the three estimated equations.

Dividends as an explanatory variable, appears to be significant in four equations under all the three models in Excel Industries Ltd. In Bayer (India) Ltd., Glaxo India Ltd., Indian Oil Corporation Ltd., Nicholas Piramal India Ltd. and Zandu Pharmaceutical Works Ltd., in 19 equations it is significant under Adding and Elimination models. In BASF India Ltd., Cheminar drugs Ltd., Colour Chem Ltd., Indian Petro Chemicals Corporation Ltd., Madras Refineries Ltd. and Tata Chemicals Ltd., in 11 equations, it is significant under Elimination model only. In the remaining seven firms like, Cipla Ltd., Clariant (India) Ltd., Gujarat State Fert & Chemicals Ltd., Monsanto Chemicals of India Ltd., Parke Davis (India) Ltd., Pidilite Industries Ltd. and Rhone-Poulenc (India) Ltd. it is found to be not significant in any of the equations under Adding model or Constant model or Elimination model. In 13 firms out of 20 firms, in most of the equations it appears to be significant under Elimination model.

Y1. Gross Block

From the table (5), it can be seen that, in Adding model in eight companies like, Glaxo India Ltd., Madras Refineries Ltd. et cetera the explanatory variable that is Growth of Equity Capital shows an impact on an investment in Gross Block in eight estimated equations, at 5% level and in three equations at 10% level. When the sample firms’ aggregate level is taken as a whole in Adding model, this particular variable is found to be not significant in all the eight estimated equations. In Constant model, Growth of Equity Capital as a variable is found to be significant at 5% level in two estimated equations and in two equations it is found to have a significant impact at 10% level in four firms like, Excel Industries Ltd., Zandu Pharmaceutical Works Ltd. et cetera. When the equations in the Constant model are tested at the aggregate of firms level in Chemical Industry, this independent variable is found to be not significant in any of the estimated equations.

When the influence of Growth of Capital as an independent variable is tested on Gross Block as a dependent variable under Elimination model, it is found to be significant in 12 estimated equations at 5% level in 10 companies like, Cheminar Drugs Ltd., Gujarat State Fert & Chemicals Ltd., Excel Industries Ltd., Nicholas Piramil Ltd. et cetera. In the above companies it is found to be significant in eight equations at 10% level. Taking the Chemical Industry as a whole, it is found to be not significant in all the estimated equations under Elimination model.

In Glaxo India Ltd., in five estimated equations, it is found to be significant at either 5% or 10% level under all the three models. In case of Cheminar drugs Ltd., Gujarat State Fert & Chemicals Ltd., Monsanto Chemicals of India Ltd., Nicholas Piramal India Ltd. and Tata Chemicals Ltd. Growth of Equity Capital as a variable is found to be significant in 14 equations under Adding and Elimination models. In the case of Gujarat Narmada Valley Fert. Co. Ltd., Indian Petro Chemicals Corporation Ltd. and Pidilite Industries Ltd., it is found to be significant in six equations under Elimination model only. In Excel Industries Ltd., in only one equation, it is found to be at 10% level of significance under Constant model. In Madras Refineries Ltd., in only one equation, it is significant at 10% level under Adding model. In Indian Oil Corporation Ltd., in two equations, it appears to be significant under Adding and Constant models. In Zandu Pharmaceutical Works Ltd., it is found to be significant in one equation under Constant model and in three equations it is found to have a significant impact at 5% level under Elimination model. In the remaining seven companies namely, BASF India Ltd., Bayer (India) Ltd., Cipla Ltd., Clariant (India) Ltd., Colour Chem Ltd., Parke Davis (India) Ltd. and Rhone-Poulenc (India) Ltd., it is found to be not significant in any of the equations under Adding model or Constant model or Elimination model. In 10 firms, Growth of Equity Capial is found to be significant in most of the equations under Elimination model only.

Y2-Plant & Machinery

When the investment in the Plant and Machinery as a dependent variable is studied, the independent variable that is, Growth of Equity Capital in found to be significant at 5% level in six estimated equations under Adding model in six firms like, Indian Oil Corporation Ltd., Monsanto Chemicals of India Ltd. et cetera. In the above companies this particular variable appears to be significant at 10% level in five equations under Adding model. Considering the sample firms’ aggregate level as a whole, its level of significance is 5% in one equation and 10% in one equation out of a total of eight equations under Adding model.

Growth of Equity Capital shows an impact on investment in Plant & Machinery in one equation at 5% level of significance and in four equations at 10% significance level in five companies like, Excel Industries Ltd., Madras Refineries Ltd. et cetera under Constant model. When the aggregate of sample firms is taken as a whole, it is found to be not significant in all the six estimated equations under Constant model. In Elimination model, Growth of Equity Capital as a variable is found to be significant at 5% level in 11 estimated equations and in two equations it is found to have a significant impact at 10% level in six firms like, Madras Refineries Ltd., Monsanto Chemicals of India Ltd., Nicholas Piramil India Ltd. et cetera. When the equations in the Elimination model are tested at the aggregate of firms level in Chemical Industry, this particular variable is not significant in all the three estimated equations.

This particular independent variable appears to be not significant in any of the estimated equations in firms like, BASF India Ltd., Bayer (India) Ltd., Cheminar drugs Ltd., Cipla Ltd., Clariant (India) ltd., Colour Chem Ltd., Glaxo India Ltd., Gujarat Narmada Valley Fert. Co. Ltd., Indian Petro Chemicals Corporation Ltd., Parke Davis (India) Ltd., Pidilite Industries Ltd. and Rhone-Poulenc (India) Ltd. under Adding or Constant or Elimination models. In Excel Industries Ltd., in two equations, it shows an impact on investment in Plant & Machinery, at 10% level under Adding and Constant models. In firms like, Indian Oil Corporation Ltd., and Madras Refineries Ltd. it is significant in nine equations under all the three models. Incase of Monsanto Chemicals of India Ltd., Nicholas Piramal India Ltd. and Zandu Pharmaceutical Works Ltd. in 15 equations its level of significance is at either 5% or 10% level under Adding and Elimination models. In Gujarat State Fert & Chemicals Ltd. it appears to be significant in one equation at 10% level under Constant model. Incase of Tata Chemicals Ltd., in two equations it is significant under Constant and Elimination models. In six firms out of a total of 20 firms, in most of the equations it is found to be significant under Adding and Elimination models.