- Semester:
III/IV
- Number of credits: 4
Preamble
This elective course, to be offered in the third semester, requires a good understanding of both Microeconomics and Macroeconomics. This course aims at providing a theoretical exposition of the behaviour of firm, market structure and industrial finance with some issues and relevant empirical evidence of Indian industries.
1. Theory of Firm (14 Lectures)
Firm Competition and Performance: Effects of Monopoly Power- Determinants of Firm Structure- Mergers- Horizontal and Vertical- Conglomerate Integration. Market Structure: Patterns of Market Structure- Determinants of Market Structure- Economies of Scale- Product Differentiation- Capital Requirements. Pricing Strategy in Oligopoly: Theories of Interdependence- Tacit Collusion and Price Leadership- Limit Pricing.
2 Technical Change (10 Lectures)
Market Concentration: Measures of Market Concentration. Advertising: Optimal Advertising- Advertising and Market Structure- Cost of Advertising. Invention and Innovation: Process and Product Innovation- Effects of Innovation on Welfare and Employment- Adoption and Diffusion of Innovation.
3 Financial Analysis (14 Lectures)
Financial Analysis: Funds Flow- Cash Flow Statements- Balance Sheet- Income Statement (Profit and Loss Account)-Ratio Analysis- Multi-Period Compounding- Continuous Compounding. Investment Appraisal: Nature of Investment Decisions- Net Present Value Method- Internal Rate of Return- Discounted Payback Period. Cost of Capital: Determining Components of Cost of Capital- Capital Asset Pricing Model (CAPM)- Weighted Average Cost of Capital (WACC). Capital Structure: Optimum Capital Structure- Modigliani-Miller Hypothesis- CAPM and Capital Structure.
4 Indian Industry (10 Lectures)
Industrial Growth: Trends in Industrial Growth in India-Industrial Location (factors) and Location Policy in India. Small-Scale Industries: Definition-Role-Policy-Issues and Performance. Public Enterprises in India: Performance and Constraints. Competitiveness of Indian Industries: Competition Policy and Foreign Direct Investment.
References
1. |
Ahluwalia I. J. (1985), Industrial Growth in India- Stagnation Since Mid-Sixties, Oxford University Press, |
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Delhi. Chapter: 2. (Module 4). |
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2. |
Hay and Morris D. J. (Latest), Industrial Economics- Theory and Evidence, Oxford University Press. |
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Chapters: 12, 13. (Module 2) |
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3. |
Koutsoyiannis A. (19985), Modern Microeconomics, ELBS/Macmillan, Hong Kong. Chapter: 13. (Module 1). |
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4. |
Martin Stephen, (1988/Latest), The Industrial Economics- Economic Analysis and Public Policy, Macmillan |
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Publishing Company, New York. Chapters: 7 and 8. (Module 1). |
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5. |
Mohanty, Binode, (1991), (Ed.) Economic Development Perspectives, Vol. 3, Public Enterprises and |
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Performance, Common Wealth Publishers, New Delhi. (Module 4). |
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6. |
Mookherjee Dilip, (1998), (Ed.) Indian Industry-Policies and Performance, Oxford University Press, Delhi. |
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Chapters: 5, 8, and 9. (Module 4). |
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7. |
Pandey I M., (2000), Financial Management, Vikas Publishing House Pvt. Ltd., New Delhi. Chapters: 2, 4, |
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7, 11, 13 and 17. (Module 3). |
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8. |
Shepherd W. C. (1985), The Economics of Industrial Organization, Prentice Hall, Inc., London. Chapters: |
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3, 4, 11, 12, 13, 14 and 15. (Modules 1 and 2). |
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9. |
Vepa R. K. (1988), Modern Small Industry in India, Sage Publications. (Module 4). |
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M.A. Credit Course 
