Financial distress, financial constraint and investment decision: Evidence from Brazil

This paper analyses the presence of financial constraint in the investment decisions of 367 Brazilian firms from 1997 to 2004, using a Bayesian econometric model with group-varying parameters. The motivation for this paper is the use of clustering techniques to group firms in a totally endogenous form. In order to classify the firms we used a hybrid clustering method, that is, hierarchical and non-hierarchical clustering techniques jointly. To estimate the parameters a Bayesian approach was considered. Prior distributions were assumed for the parameters, classifying the model in random or fixed effects. Ordinate predictive density criterion was used to select the model providing a better prediction. We tested thirty models and the better prediction considers the presence of 2 groups in the sample, assuming the fixed effect model with a Student t distribution with 20 degrees of freedom for the error. The results indicate robustness in the identification of financial constraint when the firms are classified by the clustering techniques. (C) 2010 Elsevier B.V. All rights reserved.

Sampled Control for Mean-Variance Hedging in a Jump Diffusion Financial Market

In this technical note we consider the mean-variance hedging problem of a jump diffusion continuous state space financial model with the re-balancing strategies for the hedging portfolio taken at discrete times, a situation that more closely reflects real market conditions. A direct expression based on some change of measures, not depending on any recursions, is derived for the optimal hedging strategy as well as for the ""fair hedging price"" considering any given payoff. For the case of a European call option these expressions can be evaluated in a closed form.

Cannabinoid contents in cannabis products seized in Sao Paulo, Brazil, 2006-2007

A rapid and simple method was optimized for determination of Delta(9)-tetrahydrocannabinol (Delta(9)-THC), cannabidiol (CBD), and cannabinol (CBN) contents in cannabis products by gas chromatography with flame-ionization detection (GC-FID), using diazepam as internal standard. All parameters of validation of the method such as linearity, intraassay precision, and limits of detection and quantification of the analytes were satisfactory. Using the described method, cannabinoid contents of 55 cannabis product samples seized in Sao Paulo City, Brazil, in 2006 and 2007 were measured. Delta(9)-THC content in marijuana and hashish samples varied between 0.08% and 5.5%, with an average of 2.5%. The phenotypic ratio showed that the products were able to be designated as ""drug type.""

Impact of the Subprime Crisis in the Provision of Credit Risk of Major National Banks

Financial institutions are directly exposed to the credit risk, that is, the risk of the borrower not fulfill with their obligations, paying their debts in its stated periods established previously. The bank predict this type of risk, including them in their balance-sheets. In 2006/2007 there was the impact of a new financial crisis that spread around the world, known as the crisis of subprime. The objective of this study is to analyze if the provisions for credit risk or liquidation increased the sprouting of the crisis of subprime in ten major national banks, chosen accordant to their total assets. To answer this question, the balance-sheets of each one of these banks in the period of 2005 to 2007 were analyzed. This research is characterized, as for its objectives, as descriptive and as for the procedures as documentary research. It is also characterized as having a qualitative approach. The results show that the crisis of subprime has caused little impact in the credit risk provision of the analyzed institutions. It was noticed a slight increase in the provision indicators at the peak of the crisis in 2006. These percentages were reduced in, 2007, probably reflecting the economic stability of Brazil and the stagnation of the crisis Of subprime in that year, at least in relation to in our country.

Qualitative assessment of stock prices listed on the Sao Paulo stock exchange: An approach from the perspective of homogeneity analysis

The stock market suffers uncertain relations throughout the entire negotiation process, with different variables exerting direct and indirect influence on stock prices. This study focuses on the analysis of certain aspects that may influence these values offered by the capital market, based on the Brazil Index of the Sao Paulo Stock Exchange (Bovespa), which selects 100 stocks among the most traded on Bovespa in terms of number of trades and financial volume. The selected variables are characterized by the companies` activity area and the business volume in the month of data collection, i.e. April/2007. This article proposes an analysis that joins the accounting view of the stock price variables that can be influenced with the use of multivariate qualitative data analysis. Data were explored through Correspondence Analysis (Anacor) and Homogeneity Analysis (Homals). According to the research, the selected variables are associated with the values presented by the stocks, which become an internal control instrument and a decision-making tool when it comes to choosing investments.

Multicollinearity and financial constraint in investment decisions: a Bayesian generalized ridge regression

This paper addresses the investment decisions considering the presence of financial constraints of 373 large Brazilian firms from 1997 to 2004, using panel data. A Bayesian econometric model was used considering ridge regression for multicollinearity problems among the variables in the model. Prior distributions are assumed for the parameters, classifying the model into random or fixed effects. We used a Bayesian approach to estimate the parameters, considering normal and Student t distributions for the error and assumed that the initial values for the lagged dependent variable are not fixed, but generated by a random process. The recursive predictive density criterion was used for model comparisons. Twenty models were tested and the results indicated that multicollinearity does influence the value of the estimated parameters. Controlling for capital intensity, financial constraints are found to be more important for capital-intensive firms, probably due to their lower profitability indexes, higher fixed costs and higher degree of property diversification.

IB Theory and the Entry of MNCs in Brazil from 1850 to 2007

This paper analyses the applicability of the main enterprise internationalization theories to the entry of the multinational corporations into Brazil, throughout five phases of Brazilian economy, from 1850 to nowadays. It seeks to verify the explanation power of each theory over the FDI flows in Brazil. It concludes that there is a contingency relation between the theories and the phases of the economy, and. it shows such relationship in a table. In addition, it concludes that the most powerful theory along the researched period was Dunning`s eclectic paradigm, mainly due to the Localization considerations. Theoretical propositions are put forward as a contribution to future research.

The Controllership Relevance or Risk Management in non-Financial Companies: a study of risk managers` and controllers` perceptions

The purpose of this study is to analyze the Controllership relevance as support risk management in non-financial companies. Risk management is a widely discussed and disseminated subject amongst financial institutions. It is obvious that economic uncertainties and, consequently, prevention and. control must also exist in non-financial companies. To enable managers to take safe-decisions, it is essential for them to be able to count on instrumental support that provides timely and adequate information, to ensure lower levels of mistakes and risk exposure. However, discussion concerning risk management in non-financial companies is still in its early stages in Brazil. Considering this gap, this study aims at assessing how Controllership has been acting in? companies under the insight of risk and how it can contribute to risk management in non-financial companies. To achieve the proposed goal, a field research was. carried-out with non-financial companies that are located in the city Sao Paulo and listed in the Sao Paulo Stock Exchange (Bovespa). The research was carried out using questionnaires, which were sent do Risk Officers and Controllers of those companies with the purpose of evaluating their perception on the subject. The results,of the research allow us to conclude that Controllership offers support to risk management, through information that contributes to the mitigation of the risks in non-financial companies.

Diagnosis of Organizational Soft Problems in a Peruvian Financial Institution by Systemic Thinking

Managing financial institutions in an underdeveloped economic context has become a real challenge nowadays. In order to reach the organization`s planned goals, they have to deal with structural, behavioral and informational problems. From the systemic point of view, this situation gets even worse when the company does not present organizational boundaries and a cohesive identification for their stakeholders. Thus, European countries have some special financial lines in order to help the development of micro credit in Latin communities in an attempt to help the local economy. However, institutions like Caixa dos Andes in Peru present management problems when dealing with this complexity. Based on this, how can the systemic eye help in the diagnosis of soft problems of a Peruvian financial company? This study aims to diagnose soft problems of a Peruvian financial company based on soft variables like identity, communication and autonomy and also intends to identify possible ways to redesign its basic framework. The (VSM--Viable System Model) method from Beer (1967), applied in this diagnostic study, was used in a practical way as a management tool for organizations` analysis and planning. By describing the VSM`s five systems, the creation of a systemic vision or a total vision is possible, showing the organization`s complexity from the inside. Some company`s soft problems like double control, inefficient use of physical and human resources, low information flows, slowness, etc. The VSM presented an organizational diagnosis indicating effective solutions that do integrate its five systems.

Income inequality and male homicide rates: Sao Paulo, Brazil, 1996-2007

In Sao Paulo, Brazil, homicides to men aged 15-44 years increased with an annual percentage change (APC) of 4.7% from 1996 to 2001, and then decreased from 2001 to 2007 with an APC of -14.6%. Analyzing the intra-urban distribution according to family income, the increase in the homicide rate was restricted to men living in the poorest neighbourhoods. In contrast, the decline in homicide rates was observed to men living in all districts. The reasons for this `up and down` trend are not clear.

FOR DEBATE A hypothesis for the 2007 dengue outbreak in Singapore

A previous mathematical model explaining dengue in Singapore predicted a reasonable outbreak of about 6500 cases for 2006 and a very mild outbreak with about 2000 cases for 2007. However, only 3051 cases were reported in 2006 while more than 7800 were reported in the first 44 weeks of 2007. We hypothesized that the combination of haze with other local sources of particulate matter had a significant impact on mosquito life expectancy, significantly increasing their mortality rate. To test the hypothesis a mathematical model based on the reproduction number of dengue fever and aimed at comparing the impact of several possible alternative control strategies was proposed. This model also aimed at contributing to the understanding of the causes of dengue resurgence in Singapore in the last decade. The model`s simulation demonstrated that an increase in mosquito mortality in 2006 and either a reduction in mortality or an increase in the carrying capacity of mosquitoes in 2007 explained the patterned observed in Singapore. Based on the model`s simulation we concluded that the fewer than expected number of dengue cases in Singapore in 2006 was caused by an increase in mosquito mortality due to the disproportionate haze affecting the country that year and that particularly favourable environmental conditions in 2007 propitiated mosquitoes with a lower mortality rate, which explains the greater than expected number of dengue cases in 2007. Whether our hypothesis is plausible or not should be debated further.

Demographic profile of blood donors at three major Brazilian blood centers: results from the International REDS-II study, 2007 to 2008

BACKGROUND: The profile of blood donors changed dramatically in Brazil over the past 20 years, from remunerated to nonremunerated and then from replacement to community donors. Donor demographic data from three major blood centers establish current donation profiles in Brazil, serving as baseline for future analyses and tracking longitudinal changes in donor characteristics. STUDY DESIGN AND METHODS: Data were extracted from the blood center, compiled in a data warehouse, and analyzed. Population data were obtained from the Brazilian census. RESULTS: During 2007 to 2008, there were 615,379 blood donations from 410,423 donors. A total of 426,142 (69.2%) were from repeat (Rpt) donors and 189,237 (30.8%) were from first-time (FT) donors. Twenty percent of FT donors returned to donate in the period. FT donors were more likely to be younger, and Rpt donors were more likely to be community donors. All were predominantly male. Replacement donors still represent 50% of FT and 30% of Rpt donors. The mean percentage of the potentially general population who were donors was approximately 1.2% for the three centers (0.7, 1.5, and 3.1%). Adjusting for the catchment`s area, the first two were 2.1 and 1.6%. CONCLUSIONS: Donors in the three Brazilian centers tended to be younger with a higher proportion of males than in the general population. Donation rates were lower than desirable. There were substantial differences in sex, age, and community/replacement status by center. Studies on the safety, donation frequencies, and motivations of donors are in progress to orient efforts to enhance the availability of blood.

Molecular Epidemiology of Avian Infectious Bronchitis in Brazil from 2007 to 2008 in Breeders, Broilers, and Layers

Multiple lineages of Brazilian strains from 2007 to 2008 of avian infectious bronchitis virus (IBV) were detected in flocks of breeders, broilers, and layers. Organs samples from 20 IBV-positive flocks with variable clinical signs were submitted to the partial amplification of S gene (nucleotides 726-1071) of IBV. Fifteen of the 20 sequenced strains segregated in a unique Brazilian cluster subdivided in three subclusters (Brazil 01, 02, and 03). Whereas three strains could be classified as Massachusetts (Mass) genotype, the remaining two strains, originating from flocks with reproductive and respiratory disorders, grouped within the 4/91-793B genotype, a genotype that has not been detected before in Brazil. The potential relevance of the findings to the poultry industry is discussed because the low level of identity of the sequenced part of the S gene from 17 of 20 detected field strains and the vaccines of the Massachusetts serotype used suggest that the level of cross-protection by the Massachusetts vaccines might be low.

Impacts of Animal Traffic on the Brazilian Amazon Parrots (Amazona species) Collection of the Quinzinho de Barros Municipal Zoological Park, Brazil, 1986-2007

Eleven species of Amazon parrots (genus Amazona) are known to occur in Brazil, and nest poaching and illegal traffic pose serious conservation threats to these species. When the illegal owners realize these animals are incompatible with their expectations and lifestyle, or when the police arrests traders and owners, these trafficked animals are often considered unfit for release and sent to local zoos and captive breeders. A retrospective survey of animal and necropsy records from 1986 to 2007 was used to evaluate the impacts of animal traffic on the population composition and mortality patterns of Amazon parrots at the Quinzinho de Barros Municipal Zoological Park, Sorocaba, Brazil. Data were obtained for 374 Amazon parrots of ten Brazilian species, and there was evidence that the studied population could be split into two major groups: a majority belonging to the Amazona aestiva species and a minority belonging to the remaining species. In comparison, the animals of the first group were more frequently admitted from traffic-related origins (98 vs. 75%), had a shorter lifespan (median 301 days vs. 848 days) and a higher mortality within the first year postadmission (54 vs. 37%), were less likely to receive expensive treatments, and were more frequently housed off-exhibit. On an average, parrots were found to have a short postadmission lifespan (median 356 days), with 92.5% of the birds dying within their first five years in captivity. The paper discusses the difficult dilemmas these incoming traffic-related animals pose to zoo management and official anti-traffic policies. Zoo Biol 29:600-614, 2010. (C) 2010 Wiley-Liss, Inc.