Empirical validation of CAPM

This paper pretends to show empirical evidence of the CAPM model of Sharpe-Lintner (1964) for Colombia from 2003 to 2010, whose validation is carried out using the method of Black, Jensen and Scholes (1972) but introducing certain methodological econometric type changes associated to the requirements imposed by the used sample -- Specifically, we found no empirical evidence to reject the CAPM for the Colombian economyin the period under analysis

A new form of land concentration in Colombia

This article aims to show how the Law 1448 of 2011, which explains reparation and restitution of victims, and the National Development Plan (NDP) 2011-2014 generate land concentration in Colombia -- This is due to how the NDP objectives disintegrate the Law 1448 objectives; this phenomenon could be explained using an agency model and the subsequent moral risk issue formed between the State and the victims -- Regarding these results, a game-theory model was built, and this effectively concludes that the Law 1448 and the NDP generate land concentration in Colombia

The negotiability of labor rights: an economic analysis

This paper shows the results of the applied research titled "Negotiating labor rights: an economic analysis", which analyzes the legal regulation on individual labor rights negotiation in Colombia from the viewpoint of basic economic principles (Economic Analysis of Law), in order to identify the inefficiencies caused by the prohibition of this type of negotiations -- After introducing the discipline of the Economic Analysis of Law, this article specifically analyzes the main legal principles that support the prohibition of individual negotiations which summed to the economic characteristics of the agents (workers), produce inefficiency in the labor markets

Foreign direct investment, exports, gross domestic product and the labor market in Puerto Rico

In this paper, a vector autorregresive model (VAR) is applied to examine the interrelationship among foreign direct investment, exports, Gross Domestic Product (GDP), unemployment rate and labor force participation rate in Puerto Rico, taking into account a time period that includes the fiscal years from 1980 to 2010 -- Four cointegrating vectors were found in the system which indicates that there is a long run relationship between the variables -- The findings suggest that consecutive increases in foreign direct investment inflows could significantly reduce the unemployment rate and increase interest in joining the labor force in Puerto Rico -- The same result also applies to increases in export levels -- The variations in Gross Domestic Product are mainly explained in the long run by the unemployment rate

Real options as an alternative methodology to assess investment projects

This paper aims to broaden the applicability of the assessment methodology of investment projects through real options as a key element for investment decision making -- Traditional project valuation methodologies are described and their gaps, which special characteristic is uncertainty, are presented -- A parallel between financial and real options that could be used for valuation is made, using the binomial tree method -- Finally, a case study in the construction sector shows a project valuation using expand and waiting options

The contribution of the entrepreneurial orientation to SMEs profitability: a contingent analysis that considers the environment role

This paper aims first to show the effect of the Entrepreneurial Orientation (EO) on SMEs financial performance, and second, to propose a contingency model which explores the moderating effects of environmental hostility of the relationship EO –financial performance -- To examine the research hypotheses, a sample of 121 manufacturing SMEs located in Catalonia, Spain has been used -- The results confirm a positive EO-financial performance relation, and suggest that a more positive relation exists when there is an adjustment between the EO and the environment -- Finally, the academic and entrepreneurial implications related to the EO and the SMEs environment are presented and discussed

Long-term relationship between energy consumption and GDP in Latin America: an empirical assessment using panel data

The main objetive of this research is to evaluate the long term relationship between energy consumption and GDP for some Latin American countries in the period 1980-2009 -- The estimation has been done through the non-stationary panel approach, using the production function in order to control other sources of GDP variation, such as capital and labor -- In addition to this, a panel unit root tests are used in order to identify the non-stationarity of these variables, followed by the application of panel cointegration test proposed by Pedroni (2004) to avoid a spurious regression (Entorf, 1997; Kao, 1999)

State and economy. William Beveridge and Walter Eucken's criticisms and proposals. (A historical comparative perspective)

The central problem that this paper addresses is the development of political economic thought, both in Germany and in Great Britain, related to the construction of societies in which the State had a role in ensuring levels of stability and economic security to its inhabitants, particularly during the late 1940s -- This article proposes a comparative historical perspective of political economic thought of the British economist William Beveridge and his German counterpart Walter Eucken -- The comparison is based on their critiques to the economic system and proposals on the role that the State should play in the economy -- The study of the ideas of both thinkers, their criticisms and proposals on economic and political issues, allows us to understand the set of ideas that influenced the development of the Welfare State of the post war period, both in Britain and Germany

Economic Development in Latin America and the regional integrations in the twentieth century

This paper discusses some economic integrations in Latin America, which have become an expression of governance in the neoliberalist context -- These integrations are also the results of second-generation adjustments in terms of trade openness, sale of state assets, free short-term capital mobility and Asian and European integrations that preceded the regional ones -- In addition to this, this paper provides answers to the following questions: Are integrations aiming to achieve development? Would North-countries integrations take the same endangering course as in South America? Who should benefit from the integrations? Is there a link between development and demographics?

An analysis of herd behavior in Latin American stock markets

This research investigates whether the major stock markets in Latin America (Brazil, Mexico, Chile, Colombia, Peru and Argentina) exhibited herd behavior over the period January 2, 2002 to June 30, 2014, using the variation in the returns overall and by sector in the most representative stock market index in each country, using the model proposed by Christie y Huang (1995) -- The results do not reveal any herd behavior in the total market, or in the sectors of the markets examined in the study

An evaluation of the transmission of the policy interest rate to the financial system’s interest rates in Colombia

This paper studies monetary policy transmission using several statistical tools -- We find that the relationships between the policy interest rate and the financial system’s interest rates are positive and statistically significant, and transmission is complete eight months after policy shocks occur -- The speed of transmission varies according to the type of interest rates -- Transmission is faster for interest rates on loans provided to households, and is particularly rapid and complete for rates on preferential commercial loans -- Transmission is slower for credit card and mortgage rates, due to regulatory issues (interest rate ceilings)

Global trends in relative and absolute income inequality

Este documento muestra una visión general de las tendencias históricas de la desigualdad mundial de ingreso en términos absolutos y relativos -- Dependiendo del concepto usado, las tendencias de desigualdad difieren considerablemente -- La desigualdad entre países aumentó fuertemente durante el periodo 1820-2000 y ha comenzado a disminuir a principios del siglo veintiuno, independiente si es medido en términos relativos o absolutos -- La desigualdad dentro de los países, por el contrario, ha crecido especialmente fuerte en las últimas décadas: su tasa de crecimiento aceleró a partir de 1950 en términos absolutos y a partir de 1975 en términos relativos -- En términos absolutos la desigualdad global también se incrementó sustancialmente en el periodo post-1950, mientras en términos relativos la desigualdad global ha disminuido ligeramente en el mismo periodo

For love or for money? A study of the marriage wage premium in Colombia

Being married may raise worker productivity and increase the probability of remaining in a job and, as consequence, obtaining a wage premium -- Yet, this effect may be different for males and females -- In developing countries, such as Colombia, the premium may be larger than in developed countries due to the differing social norms and labor market structures -- Using cross-sectional data from Colombian Household Surveys, this paper examines the marriage wage premium and its evolution in Colombia both at the aggregate level and by gender -- We find a marriage wage premium for both male and female populations; this wage premium is explained by the greater human capital endowment in married people and to employer favoritism due to the “social norms” which consider being married an appropriate behavior and reward it

Colombian mutual funds that invest in stocks: Do they create value?

Esta investigación evalúa el desempeño de 73 fondos de inversión colectiva (FIC) colombianos enfocados en acciones de 2005 a 2015 -- Para cuantificar el valor generado por estos fondos en comparación con sus respectivos activos de referencia (“benchmarks”), se calcula el alfa de Jensen mediante dos metodologías de regresión: Mínimos Cuadrados Ordinarios (MCO) y Regresión por Cuantiles -- También se analiza si estos fondos muestran evidencia de “market timing” o no, utilizando dos modelos: efecto cuadrático y variable binaria interactiva -- De igual manera, nuestro estudio propone la creación de una empresa privada en Colombia que provea a los inversores de información precisa sobre las características y desempeño histórico de estos fondos de inversión colectiva, como lo hace Morningstar Inc. en Estados Unidos -- Esto permitiría a los inversores seleccionar los fondos con mejores perspectivas y, como es de esperarse, haría este mercado más eficiente y atractivo para nuevos inversores potenciales

Evidence that risk adjustment is unnecessary in estimates of the User cost of money

Investors value the special attributes of monetary assets (e.g., exchangeability, liquidity, and safety) and pay a premium for holding them in the form of a lower return rate -- The user cost of holding monetary assets can be measured approximately by the difference between the returns on illiquid risky assets and those of safer liquid assets -- A more appropriate measure should adjust this difference by the differential risk of the assets in question -- We investigate the impact that time non-separable preferences has on the estimation of the risk-adjusted user cost of money -- Using U.K. data from 1965Q1 to 2011Q1, we estimate a habit-based asset pricing model with money in the utility function and find that the risk adjustment for risky monetary assets is negligible -- Thus, researchers can dispense with risk adjusting the user cost of money in constructing monetary aggregate indexes