Sustainable Finance in Emerging Markets: Rational for Indian Stock Market and Decision Making for Sustainable Future

Abstract

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This study is committed to address the global concern of sustainability by bringing in the discussion on sustainability of earnings as a new approach to measure earnings. The given research work attempts to analyse the deviations in the normal profit margin by examining operating and non-operating elements of earnings. Further, the operating and non-operating elements of earnings have been analysed to check if operating elements of earnings are superior to non-operating elements of earnings. The sustainability of earnings is also assessed by the way of Firm-Specific Approach (Time series) and Industry-Based Approach (Cross-sectional), which is called as Intensity of Operating Earnings. The analysis of data is done through advanced techniques of Dynamic Panel Data. Our findings show that the Operating Elements of earnings are higher than the non-operating elements of earnings in a significant way. Also, there is a positive association between intensity of operating earnings measures and sustainability of earnings. Therefore, this study provides evidences, which are substantial enough to project the earnings’ sustainability in Indian stock market with respect to financial sector, which can be of immense use to Assets Management Companies, Security Analysts, Organisations and Investors.

Keywords: Sustainability, Intensity of Operating-Earnings, Transitory Earnings, Dynamic Panel, Cross-Sectional

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