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MACHINERY

When the investment in Plant and Machinery as a dependent variable is studied, the independent variable that is, Change in Sales is found to be significant at 5% level in 22 estimated equations under Adding model in 12 firms like, Clariant (India) Ltd., Excel Industries Ltd., Glaxo India Ltd., Indian Oil Corporation Ltd. et cetera. In the above companies, this particular variable appears to be significant at 10% level in 16 equations. Considering the sample firms’ aggregate level, its level of significance is 5% in seven estimated equations out of a total of eight equations under Adding model.

Change in Sales shows an impact on investment in Plant and Machinery in 12 equations at 5% level of significance and in eight equations at 10% significance level in nine companies like, Clariant (India) Ltd., Glaxo India Ltd., Gujarat Narmada Valley Fert.Co. Ltd., Indian Oil Corporation Ltd. et cetera under Constant model. When the aggregate of sample firms is taken as a whole, in all the six estimated equations it is found to be significant at 5% level under Constant model.

In Elimination model, Change in Sales as a variable is found to be significant at 5% level in 20 equations and in 11 equations it is found to have a significant impact at 10% level in 12 firms like, Clariant (India) Ltd., Excel Industries Ltd., Glaxo India Ltd., Nicholas Piramal 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 has shown an impact at 5% level in all the three equations.

In firms like, Clariant (India) Ltd., Excel Industries Ltd., Glaxo India Ltd., Indian Oil Corporation Ltd. and Tata Chemicals Ltd., Change in Sales is found to be significant in 51 estimated equations at either 5% level or 10% level under all the three models. Change in Sales is found to be significant in 24 equations under Adding and Elimination models in some companies namely, Bayer (India) Ltd., Cheminar Drugs Ltd., Cipla Ltd., Nicholas Piramal India Ltd. and Zandu Pharmaceutical Works Ltd. This particular independent variable is significant in seven equations in some firms namely, Monsanto Chemicals of India Ltd. and Pidilite Industries Ltd. under Adding and Constant Models. Similarly, in Parke Davis (India) Ltd., this variable is found to be significant in three equations under Constant & Elimination models. Where as in BASF India Ltd., it is found to be at 5% level of significance in two equations under Elimination model and in Madras Refineries Ltd. In only one equation, it is found to be significant at 5% level under Constant model. Change in Sales is found to be not significant in any of the equations under Adding or Constant or Elimination model in firms like, Colour Chem Ltd., Gujarat Narmada Valley Fert. Co. ltd., Gujarat State Fert & Chemicals Ltd., Indian Petro Chemicals Corporation Ltd. and Rhone-Poulenc (India) Ltd. In most of the estimated equations of 12 firms out of a total of 20 firms this variable appears to be significant at either 5% or 10% level under Elimination model

Y1- Gross Block

From the table (2) when the investment in Gross Block as a dependent variable is studied, the independent variable that is, Gross Internal Funds is found to be significant in 18 estimated equations at 5% level and in seven equations at 10% level in 12 firms like, Indian Oil Corporation Ltd., Monsato Chemicals of India Ltd. et cetera under Adding model. Similarly, at the aggregate of sample firms in the Chemical Industry as a whole, this particular variable appears to be significant at 5% level in five equations and in two equations at 10% level of significance.

Gross Internal Funds shows an impact on investment in Gross Block. Its level of significance is 5% in 16 estimated equations and 10% level in nine equations under Constant model in 10 companies like, Indian Oil Corporation Ltd., Indian Petro Chemicals Corporation Ltd. et cetera. Considering the aggregate of sample firms in the Chemical Industry as a whole, it is found to be significant at 5% level in all the equations under Constant model.

In 11 companies like, Colour Chem Ltd., Gujarat Narmada Valley Fert Co. Ltd., Gujarat State Fert and Chemicals Ltd., Indian Oil Corporation Ltd., Pidilite Industries Ltd. et cetera the independent variable Gross Internal Funds is found to be significant in 18 estimated equations at 5% level and in nine equations at 10% level under Elimination model. In the Chemical Industry as a whole, in all the seven equations, it is found to be significant at 5% level under Elimination model.

In Glaxo India Ltd., Gujarat Narmada Valley Fert. Co. Ltd., Gujarat State Fert & Chemicals Ltd., Indian Oil Corporation Ltd. and Monsanto Chemicals of India Ltd., in 41 equations, it is found to be significant at either 5% level or 10% level under all the three models. In Cheminar Drugs Ltd. and Excel Industries Ltd., Gross Internal Funds are found to be significant in seven estimated equations under Adding and Constant models. Similarly, it is found to be significant in

10 equations under Adding & Elimination models in firms namely, Colour Chem Ltd., Pidilite Industries Ltd. and Tata Chemicals Ltd., Gross Internal Funds is found to be not significant in any of the equations under Adding model or Constant model or Elimination model in firms like, BASF India Ltd., Bayer (India) Ltd. and Clariant (India) Ltd. In Madras Refineries Ltd. in only one equation it is found to be at 10% level of significance under Constant model. In two equations this variable is found to be significant at 5% level under Elimination model. In Cipla Ltd. and Parke Davis (India) Ltd., this particular independent variable is found to be significant in two equations under Elimination model only. In Indian Petro Chemicals Corporation Ltd. and Zandu Pharmaceutical Works Ltd. it is found to be significant in seven equations under Constant model only. Gross Internal Funds is found to be significant in six equations in Nicholas Piramal India Ltd. and Rhone-Poulenc (India) Ltd. under Adding model only. In 11 firms out of 20 firms it is significant in most of the equations under Elimination model.

Y2-Plant and Machinery

From the above table, it can be seen that, in Adding model in 6 companies like, Monsanto Chemicals of India Ltd., Pidilite Industries Ltd. et cetera Gross interval funds is significant in eight equations at 5% level and in 10 equations at 10% level. When the equations in the Adding model are tested at the aggregate of firms level in Chemical Industry, this particular variable has shown an impact at 5% level in seven equations out of a total of eight estimated equations.

In Constant model, Gross internal funds as an explanatory variable is found to be significant at 5% level in nine estimated equations and at 10% level in four equations in six firms like, Gujarat State Fert & Chemicals Ltd., Indian Oil Corporation Ltd. et cetera. Taking the aggregate of sample firms as a whole, this dependent variable is found to be significant at 5% level in all the six estimated equations under Constant model. When the investment in Plant and Machinery as a dependent variable is studied, the independent variable that is, Gross Internal Funds appears to be significant at 5% level in 14 equations and in 11 equations at 10% level in 10 firms like, BASF India Ltd., Colour Chem Ltd., Monsanto Chemicals of India Ltd., Pidilite Industries Ltd. et cetera. Where as in the Chemical Industry as a whole, in all the three equations it is found to be significant at 5% level under Elimination model.

Gross Internal Funds is found to be significant in 42 equations in all the three models, in firms like, Cheminar Drugs Ltd., Excel Industries Ltd., Indian Oil Corporation Ltd., Monsanto Chemicals of India Ltd. and Pidilite Industries Ltd., this particular variable is found to be not significant in any of the equations under Adding model or Constant model or Elimination model in companies like, Bayer (India) Ltd., Clariant (India) Ltd., Glaxo India Ltd., Indian Petro Chemicals Corporation Ltd., Madras Refineries Ltd., Parke Davis (India) Ltd., Rhone-Poulence (India) Ltd., Tata Chemicals Ltd. and Zandu Pharmaceutical Works Ltd. In BASF India Ltd., Cipla Ltd. and Nicholas Piramal India Ltd. this independent variable appears to be significant in six equations under Elimination model only. In Colour Chem Ltd., it is significant in five equations under Adding and Elimination models. In Gujarat Narmada Valley Fert. Co., Ltd., its level of significance is at 10% level in two equations under Elimination model and in only one equation under Constant model. In 10 firms, in most of the equations, it is significant at either 5% level or 10% level under Elimination model.

Y1. Gross Block

From the table (3) Stock of Net Liquidity shows an impact on investment in Gross Block. Its level of significance is 5% in 17 estimated equations and 10% in 11 equations under Adding model in eight firms like, Cheminar Drugs Ltd., Monsanto Chemicals of India Ltd., Tata Chemicals Ltd. et cetera. When the equations in the Adding model are tested at the aggregate of firms level in Chemical Industry, this explanatory variable appears to be significant at 5% level in three equations and in only one equation it is significant at 10% level.

When the investment in Gross Block as a dependent variable is studied, Stock of Net Liquidity has shown an impact at 5% level in three estimated equations and at 10% level in three equations in six firms like, Gujarat Narmada Valley Fert. Co. Ltd., Gujarat State Fert &Chemicals Ltd., Indian Oil Corporation Ltd., Monsanto Chemicals of India Ltd., Tata Chemicals Ltd. et cetera under Constant model. When the aggregate of sample firms is taken as a whole, in only one equation, it is found to be at 5% level of significance out of a total of six estimated equations under Constant model.

When the influence of Stock of Net Liquidity as an independent variable is tested on Gross Block as a dependent variable under Elimination model, in 20 estimated equations, it is found to be significant at 5% level and in two equations at 10% level in 10 companies like, Cheminar Drugs Ltd., Colour Chem Ltd., Gujarat Narmada Valley Fert Co. Ltd., Gujarat State Fert & Chemicals Ltd., Indian Oil Corporation Ltd., Tata Chemicals Ltd., Zandu Pharmaceutical Works Ltd. et cetera. Taking the Chemical Industry as a whole, it is significant in only one equation at 10% level out of a total of seven equations under Elimination model.

Stock of Net Liquidity appears to be significant in 39 equations under all the three models in companies like, Cheminar Drugs Ltd., Gujarat Narmada Valley Fert. Co. Ltd., Gujarat State Fert & Chemicals Ltd., Monasanto Chemicals of India Ltd. and Tata Chemicals Ltd. It is found to be not significant in any of the equations under Adding model or Constant model or Elimination model in firms like, BASF India Ltd., Bayer (India) Ltd., Cipla Ltd., Clariant (India) Ltd., Excel Industries Ltd., Indian Oil Corporation Ltd., Parke Davis (India) Ltd., Pidilite Industries Ltd. and Rhone-Poulenc (India) Ltd. In Colour Chem Ltd and Glaxo India Ltd. in seven equations this variable is found to be significant under Adding and Elimination models. In Indian Petro Chemicals Corporation Ltd., Madras Refineries Ltd. and Zandu Pharmaceutical Works Ltd., in six equations it appears to be significant under Elimination model. In Nicholas Piramal India Ltd. this particular variable is found to be significant in only one equation at 5% level under Constant model and in three equations it is significant at 5% level under Adding model. In 10 firms out of a total of 20 firms it is found to be significant in most of the equations under Elimination model.