Taylor rule in Brazil

In this paper, we use the Taylor Rule to characterize empirically the Brazilian monetary policy before and after its major and succesful stabilization plan, Real Plan, launched in 1994. Specifically, we show how the inflation coefficient has changed after the stabilization plan was carried out. This is a natural experiment to test theories surrounding the Taylor Rule in which monetary instability is characterized by an inflation coefficient less than one, whereas monetary stability will have a greater than one coefficient (seeWoodford’s (2003)). Very suprisingly the paper shows that the inflation coefficient has remained less than one even after the stabilization. Our results are quite robust with respect to different samples, lags of variables, proxies for GDP, proxies for potential GDP and even with respect to econometric methods (see Bueno (2005a, 2005b)). The implications are very important both theoretically and empirically. First, it shows some gap in theory that deserves further investigation. Second, it suggests that the inflation targeting regime has been uneffective in Brazil confirming a feeling largerly spread among Brazilians.

Taylor rule in Brazil

In this paper, we use the Taylor Rule to characterize empirically the Brazilian monetary policy before and after its major and succesful stabilization plan, Real Plan, launched in 1994. Specifically, we show how the inflation coefficient has changed after the stabilization plan was carried out. This is a natural experiment to test theories surrounding the Taylor Rule in which monetary instability is characterized by an inflation coefficient less than one, whereas monetary stability will have a greater than one coefficient (seeWoodford’s (2003)). Very suprisingly the paper shows that the inflation coefficient has remained less than one even after the stabilization. Our results are quite robust with respect to different samples, lags of variables, proxies for GDP, proxies for potential GDP and even with respect to econometric methods (see Bueno (2005a, 2005b)). The implications are very important both theoretically and empirically. First, it shows some gap in theory that deserves further investigation. Second, it suggests that the inflation targeting regime has been uneffective in Brazil confirming a feeling largerly spread among Brazilians.

Assesment of port governance in Brazil: a managerial perspective on the port of Santos

The role of maritime transportation within international trade was drastically revamped during the inception of the globalization process, which enhanced the contribution of ports in world economy as main logistics gateways for global production and trade. As a result, the relationship between ports and governments has changed. Devolution ideologies that had been applied in other industries decades ago were now being considered by governments for the port industry. Many central governments sought to extract themselves from commercial activities of ports and devolving this responsibility to local governments, communities or private entities. The institution of devolution programs also changed the governance structures of ports further influencing port performance. Consequently, the recent worldwide trend towards devolution in the port industry has spawned considerable variety of governance models that are now set in place around the world. While some countries opt for more decentralized structures others prefer to retain a centralization of powers. In this way some governments consider local features and national integration more than others, which ultimately influence the success of a port reform implementation. Nevertheless, the prime intent of governments is now to maximize the efficiency and performance of their domestic ports. This issue intends to examine the changed port governance environment in Brazil by determining how and why imposed port reforms of the Brazilian federal government have been affecting the overall performance of the national port system, over the last decades, using the Port of Santos as a sample upon an exploratory study. For that, the study will use a contingency theory-based framework – the Matching Framework - that views port performance as a function of the fit among the dimensions of external operating environment, strategy and structure of a port organization. In essence, the greater the fit among these dimensions the better the expected performance of a port will be, and vice-versa. Port managers, government officials and academics alike shall be interested in this document.

Main problems with the taxation of civil society organizations in Brazil: certifications and impact on payroll

The objective of this paper is to identify and analyze the main problems in the taxation—regarding both taxes themselves and compliance costs of taxation—of civil society organizations in Brazil. This study is qualitative descriptive research. A multiple case study with 26 organizations was performed. The results show that the problems mainly affect organizations with lower revenue and that do not work in the areas of education, health or social care. The main problems involve the taxation of the payroll and the difficulties related to obtaining and maintaining certifications. The study concludes with suggestions for the improvement of the regulatory framework.

A new playing field: retrospective voting and soccer in Brazil

O propósito deste estudo é analisar o possível impacto que um viés emocional possa ter nos julgamentos dos eleitores. Nesse sentido utilizamos o futebol como fonte exógena de um choque. O nosso modelo de efeitos fixos nos leva a concluir que vitórias de equipes no final de semana da eleição estão associadas a maior votação no incumbente indicando que um viés emocional pode influenciar o eleitor.

Debt maturity determinants in Brazil: evidence from private and public corporate borrowings

This study provides an empirical investigation of the determinants of long-term debt maturity in Brazil. We built a unique database that includes privately placed debt and public debt for 308 publicly traded, non-financial Brazilian companies, from 2009 to 2013. We perform GMM panel analyses using as dependent variables the amount of long-term debt payable in more than one, three, and five years for total debt, BNDES (Brazilian Development Bank) debt and corporate bonds. The results show that the BNDES finances less risky firms, i.e., those that are larger, older, more tangible and more transparent. We also find support for information asymmetry theories, as companies with higher transparency levels have similar leverage levels relative to others but higher proportions of long-term debt in their capital structures. Regarding debt levels, we find that more levered companies are larger, less profitable, more tangible and have fewer growth opportunities. To our knowledge, this is the first paper to address the determinants of long-term debt maturity in Brazil that uses various specifications of long-term debt and that examines different types of debt.

General (in-house) counsels in Brazil: career, professional profile and a new role

This paper discusses who the legal directors are in private companies in Brazil, emphasizing their profile, career, and performance, focusing on the period of 2008- 2013, investigating changes which have occurred to legal departments in those companies, and to legal directors’ careers. Our argument is that since the expansion of legal departments in Brazil in the 1990s, with expanding privatizing of companies and further opening of the Brazilian market to foreign capital, the profiles and careers of legal directors have undergone several transformations, culminating in more value and prestige being given to those professionals inside companies. This paper explores these transformations and the a series of implications generated for the corporate legal market in the country, ranging from changing the criteria for hiring professionals, to creating new demands for more sophisticated legal services.

The manufacturing industry in Brazil in the era of global value chains

This article presents a comprehensive and detailed overview of the international trade performance of the manufacturing industry in Brazil over the last decades, emphasizing its participation in Global Value Chains. It uses information from recent available global inputoutput tables such as WIOD (World Input-output database) and TIVA (Trade in Value Added, OECD) as well as complementary information from the GTAP 8 (Global Trade Analysis Project) database. The calculation of a broad set of value added type indicators allows a precise contextualization of the ongoing structural changes in the Brazilian industry, highlighting the relative isolation of its manufacturing sector from the most relevant international supply chains. This article also proposes a public policy discussion, presenting two case studies: the first one related to trade facilitation and the second one to preferential trade agreements. The main conclusions are twofold: first, the reduction of time delays at customs in Brazil may significantly improve the trade performance of its manufacturing industry, specially for the more capital intensive sectors which are generally the ones with greater potential to connection to global value chains; second, the extension of the concept of a “preferential trade partner” to the context of the global unbundling of production may pave the way to future trade policy in Brazil, particularly in the mapping of those partners whose bilateral trade relations with Brazil should receive greater priority by policy makers.

Dip financing of financially distressed companies in Brazil – the conditions provided by the brazilian bankruptcy law act as real incentives for dip lenders as in chapter 11 of the American bankruptcy code?

O objeto deste trabalho é a compreensão do financiamento de empresas em crise, mais especificamente, o financiamento concedido após o pedido de recuperação judicial, como forma de permitir que a empresa saia da situação de crise e retorne à condição de normalidade. Para tanto, nos apropriando do termo cunhado pela doutrina norte-americana, para fazer referência ao aporte de recursos em empresas em dificuldade, utilizaremos o termo DIP financing ou financiamento DIP. Para uma compreensão adequada do objeto, é necessário que entendamos a origem do DIP financing nos Estados Unidos e como é a regulação norte-americana sobre a matéria atualmente. O segundo passo será avaliar a possibilidade de aplicação da mesma estrutura de aporte de recursos no Brasil. Ao estudarmos a origem desse mecanismo nos Estados Unidos, veremos os problemas que surgiram ao longo dos anos e como foram superados jurisprudencialmente e doutrinariamente para que o financiamento DIP se consolidasse como uma das formas de aporte de capital em empresas em crise, culminando no desenvolvimento de uma verdadeira indústria de crédito às empresas em dificuldade. Uma análise dos problemas enfrentados pelo sistema falimentar americano nos levará a hipótese de que, a menos que sejam afirmados mecanismos que assegurem a quem concede o financiamento após o pedido de recuperação judicial, uma super prioridade no recebimento após a recuperação judicial, será possível o desenvolvimento de um mercado de DIP financing no Brasil.

Fiscal policy in Brazil: from counter-cyclical response to crisis

The main goal of this article is to identify the dynamic effects of fiscal policy on output in Brazil from 1997 to 2014, and, more specifically, to estimate those effects when the output falls below its potential level. To do so, we estimate VAR (vector autoregressive) models to generate impulse-response functions and causality/endogeneity tests. Our most remarkable results indicate the following channel of economic policy in Brazil: to foster output, government spending increases causing increases in both tax rates and revenue and the short-term interest rate. A fiscal stimulus via spending seems efficient for economic performance as well as monetary policy; however, the latter operates pro-cyclically in the way we defined here, while the former is predominantly countercyclical. As the monetary shock had a negative effect on GDP growth and GDP growth responded positively to the fiscal shock, it seems that the economic policy has given poise to growth with one hand and taken it with the other one. The monetary policy is only reacting to the fiscal stimuli. We were not able to find any statistically significant response of the output to tax changes, but vice versa seems work in the Brazilian case.

The challenges faced by the external audit industry in Brazil: an exploratory study

The auditing role in the contemporaneous business environment, and increasing interest in and demand for governance and transparency, has become an element even more important to the society, as a whole, in order to build solid basis to the development of businesses and generation of wealth through technical knowledge, independence, transparency, credibility, and ethics. Nevertheless, the external financial audit industry in the world and also particularly in Brazil has faced several challenges which threaten its success and evolution. In this sense, since the external audit industry in Brazil has been immersed in a deep crisis with features that are explored through this study, allow me to create an analogy over this study saying that the external financial audit industry is like a sick person with a chronic disease, but the disease has not yet been diagnosed and the person has been dealing with the isolated symptoms. This person, the external audit industry, has struggled with this disease for many years and it is getting worse. It is fundamental to highlight that the challenges faced by the external audit industry in Brazil, ultimately, have not harmed the industry only, but they also materialize themselves as chronic issues for the corporate governance and the capital markets since they harm every interested party. In my point of view, the hardest affected are the investors or shareholders whose interest the independent auditor’s work seeks to preserve. Therefore, the purpose of this study is to have a picture of the challenges faced by the external audit industry in Brazil and understand those challenges as a requirement to analyze the potential alternatives to solve them or, analogically, to diagnose this disease. The research purpose is to map and identify the challenges faced by the external audit industry in Brazil based on the understanding of professionals seasoned in the area. Those challenges are mapped and understood through a methodological approach, a questionnaire answered by auditors with experience in the Brazilian auditing market. The challenges were preliminarily listed based on over 16 years of experience of the author in the area of auditing and financial and accounting services, discussions and interviews about the topic with seasoned professionals, and analyses of pieces of news, publications and academic studies. The questionnaire was used in order to validate the challenges, observations, perspectives, and perceptions gathered through those resources. Despite of the fact that the study is highly relevant, it was not found, through my research, other analyses on this topic with a similar approach which is intended by this study. It looks like the external audit industry in Brazil has walked through these new age dealing with problems on a daily basis and the real challenges of the industry may be concealed by the economic conditions in Brazil and other explanations. As in any problematic scenario, in which a critical analysis is needed, having an accurate picture and understanding of the challenges is a crucial step to start exploring alternatives to address them.

A qualitative study of the internationalization of born-global technology start-ups in Brazil

O fenômeno das empresas born globals e a internacionalização de empresas brasileiras de base tecnológica são tópicos recentes na literatura acadêmica, devido também ao fenômeno ser recente. Não existem muitos estudados feitos com foco no mercado brasileiro, e os poucos que foram feitos, possuem um viés quantitativo. Esse estudo, entretanto, tem como objetivo analisar startups de maneira qualitativa. Uma extensa revisão de literatura foi desenvolvida a fim de melhor analisar as fundações nas quais o estudo seria desenvolvido, revisando os métodos de internacionalização, empreendedorismo no Brasil, e o fenômeno born global no geral. Entrevistas foram conduzidas com empreendedores no Brasil, que passaram pelo processo de internacionalização de seus modelos de negócios, a fim de reunir introspecções a respeito das peculiaridades do mercado brasileiro. Foram também analisados os fatores de escalabilidade de modelos de negócios dependentes de tecnologia, motivadores para a internacionalização, critério de seleção de mercados, programas governamentais, e o papel das startups brasileiras em uma perspectiva global.

An essay on private equity: the history and fundamentals of fundraising in Brazil

O impacto positivo dos investimentos de Private Equity e Venture Capital (PE/VC) na economia e no mercado de capitais está amplamente documentado pela literatura acadêmica internacional. Nos últimos 40 anos, diversos autores têm estudado a influência desta classe de ativos na criação, no desenvolvimento e na transformação de milhares de empresas ao redor do mundo, especialmente nos Estados Unidos. Entretanto, os estudos sobre os determinantes da captação de recursos de PE/VC têm se desenvolvido apenas mais recentemente, e seus resultados estão longe de ser uma unanimidade. No Brasil, a pesquisa sobre a indústria de PE/VC ainda é escassa. Embora a indústria local venha crescendo rapidamente desde 2006, tendo alcançado US$36,1 bilhões em capital comprometido em 2009, ainda não há estudos sobre as variáveis que influenciam na alocação de capital pelos investidores nesta modalidade de investimento no Brazil. Entender esta dinâmica é importante para o equilíbrio e a eficiência de mercado. Baseado no trabalho de Gompers e Lerner (1998) sobre os determinantes da indústria de PE/VC nos Estados Unidos, este trabalho contribui com a literatura de PE/VC ao: (i) revisitar o começo desta indústria no Brasil; e (ii) identificar quais as variáveis influenciam no desenvolvimento da indústria de PE/VC local. Os resultados deste estudo contribuem para o desenvolvimento acadêmico da indústria de PE/VC no Brasil. Além disso, as discussões aqui apresentadas poderão impactar outras áreas de estudo que são permeadas pelo tema, tais como Gestão de Investimentos, Governança Corporativa, Empreendedorismo e Estratégia. Profissionais de mercado também deverão se interessar no trabalho. As discussões sobre a história e os fundamentos da indústria fornecem aos investidores, empreendedores, gestores de investimentos e formuladores de políticas públicas, entre outros, um melhor entendimento sobre como o ecossistema de PE/VC funciona no Brasil.

Sustainability indexes: why join in? A study of the Corporate Sustainability Index (ISE) in Brazil

In the past decade, indicators have been created to assess the sustainability performance of companies listed in stock exchange markets. Academics and practitioners expect companies to benefit from being listed in such indexes, but evidence of value creation is still scarce. Since virtually all studies about the Corporate Sustainability Index (ISE) of the S~ ao Paulo Stock Exchange (Brazil) e the object of the present study e focused on the value of shares, we initially looked for answers in the finance theory. We collected secondary data about the financial and economic performance of companies forming the ISE's ‘theoretical portfolio’, as these kinds of indexes are also known. In a second stage, we sought additional motivations for companies to make efforts to be listed in the index. We collected additional data and interviewed representatives of key companies listed in the ISE, as well as industry leaders who chose not to participate in the selection process. The results support the main propositions of the institutional theory, as well as the ‘pays to be green’ literature e that the intangible value created by voluntary environmental initiatives, such as access to knowledge, new capabilities and reputational gain, better explain the efforts companies make to be listed in the ISE index