FOREIGN INVESTMENT AND THE BRAZILIAN REAL ESTATE MARKET

This article discusses the main aspects of the Brazilian real estate market in order to illustrate if it would be attractive for a typical American real estate investor to buy office-building portfolios in Brazil. The article emphasizes: [i] - the regulatory frontiers, comparing investment securitization, using a typical American REIT structure, with the Brazilian solution, using the Fundo de Investimento Imobiliario - FII; [ii] - the investment quality attributes in the Brazilian market, using an office building prototype, and [iii] - the comparison of [risk vs. yield] generated by an investment in the Brazilian market, using a FII, benchmarked against an existing REIT (OFFICE SUB-SECTOR) in the USA market. We conclude that investing dollars exchanged for Reais [the Brazilian currency] in a FII with a triple A office-building portfolio in the Sao Paulo marketplace will yield an annual income and a premium return above an American REIT investment. The highly aggressive scenario, along with the strong persistent exchange rate detachment to the IGP-M variations, plus instabilities affecting the generation of income, and even if we adopt a 300-point margin for the Brazil-Risk level, demonstrates that an investment opportunity in the Brazilian market, in the segment we have analyzed, outperforms an equivalent investment in the American market.

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.

Tiering strategic environmental assessment and project environmental impact assessment in highway planning in Sao Paulo, Brazil

Constructing highways in dense urban areas is always a challenge. In Sao Paulo Metropolitan Region, heavy truck traffic contributes to clog streets and expressways alike. As part of the traffic neither originates nor head to the region, a peripheral highway has been proposed to reduce traffic problems. This project called Rodoanel, is an expressway approximately 175 km long. The fact that the projected south and north sections would cross catchments that supply most of the metropolis water demand was strongly disputed and made the environmental permitting process particularly difficult. The agency in charge commissioned a strategic environmental assessment (SEA) of a revamped project, and called it the Rodoanel Programme. However, the SEA report failed to satisfactorily take account of significant strategic issues. Among these, the highway potential effect of inducing urban sprawl over water protection zones is the most critical issue, as it emerged later as a hurdle to project licensing. Conclusion is that, particularly where no agreed-upon framework for SEA exists, when vertical tiering with downstream project EIA is sought, then a careful scoping of strategic issues is more than necessary. If an agreement on `what is strategic` is not reached and not recognized by influential stakeholders, then the unsettled conflicts will be transferred to project EIA. In such a context, SEA will have added another loop to the usually long road to project approval. (c) 2008 Elsevier Inc. All rights reserved.

Strategic alignment and performance: Brazilian companies in the medical diagnostics sector

A gap has been identified in the literature on the diagnosis and monitoring of the degree of strategic alignment. The main objective of this article is to diagnose and analyze the strategic alignment profile using the alignment diagnostic profile (ADP) tool, which enables organizations to show visually their degree of strategic alignment. The methodological approach adopted is multiple-case studies, which were conducted at five organizations in the medical diagnostics sector. The results indicate that the ADP enables organizations to understand the steps required to improve their level of alignment and to identify and locate gaps and conflicts.

Tax Cost of Investment Projects: the case of ICMS credits

This article discusses the impact on the profitability of firms under Complementary Law 102/2000 (which abrogated the Law 89/96 - Kandir Law) allowing the appropriation of ICMS credits, due to investment in fixed assets goods, at a ratio of 1/48 per month. The paper seeks to demonstrate how this new system - which resulted in the transformation of the ICMS as a value added tax (VAT) consumption-type to an income-type - leads to a loss of approximately 30% of the value of credits to be recovered and the effect it generates on the cost of investment and the profits for small, medium and large firms. From the methodological point of view, it is a descriptive and quantitative research, which proceeded in three stages. Initially, we have obtained estimated value of net sales and volume of investments, based on report Painel de Competitividade prepared by the Federacao das Indtustrias do Estado de Sao Paulo (Fiesp/Serasa). Based on this information, it was possible to obtain estimates of the factors of generation of debits and credits for ICMS, using the model Credit Control of Fixed Assets (CIAP). Finally, we have calculated three indicators: (i) present value of debt recovery/value of credits, (ii) present value of debt recovery / investment value, (iii) present value of debt recovery / sales profitability. We have conclude that the system introduced by Complementary Law 102/2000 implicates great opportunity cost for firms and that legislation should be reviewed from this perspective, aiming to ensure lower costs associated with investment projects.

Mapping the Contemporary Studies on Alliances and Strategic Networks

The competition among the companies depends on the velocity and efficience they can create and commercialize knowledge in a timely and cost-efficient manner. In this context, collaboration emerges as a reaction to the environmental changes. Although strategic alliances and networks have been exploited in the strategic literature for decades, the complexity and continuous usage of these cooperation structures, in a world of growing competition, justify the continuous interest in both themes. This article presents a scanning of the contemporary academic production in strategic alliances and networks, covering the period from January 1997 to august 2007, based on the top five journals accordingly to the journal of Citation Report 2006 in the business and management categories simultaneously. The results point to a retraction in publications about strategic alliances and a significant growth in the area of strategic. networks. The joint view of strategic alliances and networks, cited by some authors a the evolutionary path of study, still did not appear salient. The most cited topics found in the alliance literature are the governance structure, cooperation, knowledge transfer, culture, control, trust, alliance formation,,previous experience, resources, competition and partner selection. The theme network focuses mainly on structure, knowledge transfer and social network, while the joint vision is highly concentrated in: the subjects of alliance formation and the governance choice.

Cattle Grazing Distribution and Efficacy of Strategic Mineral Mix Placement in Tropical Brazilian Pastures

A study was conducted in Brazil to identify factors affecting grazing distribution of yearling Nelore cross heifers and to evaluate the efficacy of placement of a salt-mineral mix away from water to improve uniformity of grazing. Two pastures (25 ha and 42 ha) were evaluated for four 15-d sessions. Mineral mix was placed 590 m to 780 m from water during two sessions and at water for two sessions. Stubble heights were measured at the beginning and end of each session in 1-ha subunits of each pasture. Cattle locations were recorded oil clay 13 and 14 of each session by horseback observers. Heifers avoided areas with a preponderance of forbs and taller grass (P < 0.001). For the first 15 days of the study cattle avoided subunits farther from water. Thereafter, horizontal distance from water had no affect on grazing use (P > 0.10). Stubble height reduction was more uniform (P < 0.05) when the mineral mix was Lit water compared to away from water. In contrast, heifers spent less time farther from water when Mineral mix was placed at water (P = 0.02) based Oil Visual observations. Strategic placement of a salt-mineral mix away from water does not appear to be a reliable tool to improve cattle grazing distribution in humid tropical pastures from 25 ha to 45 ha in size.

The game to play: expanding the co-opetition proposal through the strategic games matrix

Purpose - Using Brandenburger and Nalebuff`s 1995 co-opetition model as a reference, the purpose of this paper is to seek to develop a tool that, based on the tenets of classical game theory, would enable scholars and managers to identify which games may be played in response to the different conflict of interest situations faced by companies in their business environments. Design/methodology/approach - The literature on game theory and business strategy are reviewed and a conceptual model, the strategic games matrix (SGM), is developed. Two novel games are described and modeled. Findings - The co-opetition model is not sufficient to realistically represent most of the conflict of interest situations faced by companies. It seeks to address this problem through development of the SGM, which expands upon Brandenburger and Nalebuff`s model by providing a broader perspective, through incorporation of an additional dimension (power ratio between players) and three novel, respectively, (rival, individualistic, and associative). Practical implications - This proposed model, based on the concepts of game theory, should be used to train decision- and policy-makers to better understand, interpret and formulate conflict management strategies. Originality/value - A practical and original tool to use game models in conflict of interest situations is generated. Basic classical games, such as Nash, Stackelberg, Pareto, and Minimax, are mapped on the SGM to suggest in which situations they Could be useful. Two innovative games are described to fit four different types of conflict situations that so far have no corresponding game in the literature. A test application of the SGM to a classic Intel Corporation strategic management case, in the complex personal computer industry, shows that the proposed method is able to describe, to interpret, to analyze, and to prescribe optimal competitive and/or cooperative strategies for each conflict of interest situation.

Incorporating demand-side aspects into regional policy: variations in the importance of private investment decision factors across regions

Most regional programs focus on the supply side of regions, emphasizing the attraction conditions offered, such as infrastructure, labor skills, tax incentives, etc. This study analyzes one aspect of the demand side, that is, how investment decisions of private firms are made by asking the question: ""Do corporations decide the same way on investments in different parts of the territory?"" The paper analyzes the investments of 373 large Brazilian firms during 1996-2004. Based on the investment decisions of these firms, the role of sales, cash-flow, external financing, and working capital is investigated through regression analysis. The regional influence is captured by explanatory variables representing regional and firm characteristics, and by interaction dummies between the region and the main investment determinants. The results indicate significant differences across regions in the importance of investment determinants. This information is important for regional development policy, because different mechanisms should be used in different regions to foster private investments.

Heterogeneity, saving-investment dynamics and capital mobility in Latin America

The purpose of this paper is to analyze the dynamics of national saving-investment relationship in order to determine the degree of capital mobility in 12 Latin American countries. The analytically relevant correlation is the short-term one, defined as that between changes in saving and investment. Of special interest is the speed at which variables return to the long run equilibrium relationship, which is interpreted as being negatively related to the degree of capital mobility. The long run correlation, in turn, captures the coefficient implied by the solvency constraint. We find that heterogeneity and cross-section dependence completely change the estimation of the long run coefficient. Besides we obtain a more precise short run coefficient estimate compared to the existent estimates in the literature. There is evidence of an intermediate degree of capital mobility, and the coefficients are extremely stable over time.

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.

Adoption of Strategic Alliances by Shoes Industries of the Vale do Rio dos Sinos-RS and Franca-SP clusters: an exploratory study

The new environment of the companies, result of the relative opening of the market caused by the globalization has set a new challenge to assure the continuity of the businesses. Competitive strategies have been implemented aiming to overcome such challenge and, amongst them, strategic alliances have shown to be a viable alternative. In this context, this article has as objective to investigate the degree of use of strategic alliances by the medium and large companies of the shoes industries located in clusters of Vale do Rio dos Sinos (RS) and Franca (SP). This exploratory and descriptive research had the participation of 54 companies, being 3 from Vale do Rio dos Sinos and 21 from Franca, which answered a questionnaire with closed questions. The analysis of the data was given through descriptive statistics. Main conclusions, follow as: (1) the majority of the companies have joint activities; (2) the companies are nearer to alliances that do business than to the strategic ones; (3) alliances with competitors are inexpressive - suppliers and customers predominate; (4) the control of alliances result is insufficient; (5) trust and adequate partner are determinative factors.

Personal Values as Basis for Strategic Segmentation: a study with Professionals from Sao Paulo

An important segmentation basis used by firms is related to consumers` personal values which are investigated in this study. It was used a descriptive research with the survey method of data collection in a sample of executives from Sao Paulo who are considered to be potential buyers of high value and innovative goods. An exploratory factor analysis was employed in order to reduce the values scale used and a cluster analysis was performed to identify the groups of executives according to the importance attached to different person values. Concluding, it was observed that there was a similarity among the three personal values dimensions, named as Civility (concerns about having a good conduct before society according to social rules of interaction), Self-Direction (intellectual aspects and practical orientation in their conducts) and Conformity (restriction of actions, inclinations and impulses, that are likely to harm others and would violate expectations) and the ones reported in the theory Rokeach`s theory about instrumental personal values. Furthermore, three groups of executives were identified (good conduct group, low restriction group and high restriction group). The differences observed in the importance of personal values here presented by the dimensions called Civility, Self-Direction and Conformity can lead to different buying behaviors and product preferences. From the results found in this study the companies could adapt their current and new products offers, as well as their communication in order to better serve these segments of executives from Sao Paulo.

Maternal investment in egg production: environmental and population-specific effects on offspring performance in the snapping shrimp Alpheus nuttingi (Schmitt, 1924) (Decapoda, Alpheidae)

Among marine invertebrates, the overall biomass invested in egg production varies widely within populations, which can result from the interaction of endogenous and exogenous factors. Species that have constant reproduction throughout the year can be good models to study the influence of environmental factors on reproductive processes. We conducted a seasonal comparison of egg production in the intertidal snapping shrimp Alpheus nuttingi, which shows a continuous reproductive pattern, to examine the hypothesis that differences in egg production are driven by environmental conditions and population features. This population showed an uncommon strategy, characterized by females that produce eggs of varying sizes within their clutches, with reduced egg volume when the number of eggs is higher (Spring-Summer). In these seasons, higher temperatures and greater food availability may allow the production of more eggs compared to the Autumn-Winter seasons. Compared to other alpheid shrimps, this population produces small eggs, but in larger numbers. Despite the higher fecundity, the reproductive output is relatively low, this production being supported by the large size of females from the southern Atlantic region. Our findings showed that the egg production of A. nuttingi was greatly influenced by environmental factors. Therefore, this shrimp, and probably other decapods that possess continuous reproduction, adopt different reproductive strategies during the year. (C) Koninklijke Brill NV, Leiden, 2010.

Strategic maxillary second-molar extraction in Class II malocclusion

Maxillary second-molar extraction in Class II malocclusion is a controversial issue in orthodontics. This treatment protocol is rigorous and not routine. In this case report, we present the orthodontic treatment of a patient with a Class II malocclusion, maxillary crowding, and no mandibular first molars, treated with extraction of the maxillary second molars. The mechanotherapy and indications of maxillary second- molar extraction are discussed. (Am J Orthod Dentofacial Orthop 2009;136:878-86)