The impact of past hyperinflation on current household investment behavior

Neste estudo é proposto que a instabilidade macroeconômica extrema causada pela hiperinflação nas décadas de 80 e 90 no Brasil causou um efeito de longo prazo no comportamento de poupança dos indivíduos. Usando dados da Pesquisa Nacional por Amostra de Domicílio (PNAD) de 2009 e 2011 e um questionário complementar, encontramos três evidências significantes: (1) indivíduos que possuem memória do período de hiperinflação no Brasil tem uma menor probabilidade de participar do mercado de ações; (2) há uma forte evidência que pessoas que estavam em idade formativa durante a hiperinflação são menos dispostos de possuir algum tipo de instrumento financeiro do que pessoas que tiveram a experiência desse choque macroeconômico em outros períodos de suas vidas; (3) mulheres solteiras são muito mais prováveis de ter uma poupança financeira que homens solteiros.

Effects of trade policy on technology adoption and investment

This paper studies the consequences of trade policy for the adoption of new technologies. It develops a dynamic international trade model with two sectors. Workers in manufacturing decide if new technologies are used, capital owners then choose investment. We analyze three different arrangements: free trade, tariffs, and quotas. In the model economy, free trade as well as tariffs guarantee that the most productive technology available will be used. In contrasL under a quota the most productive technology available will not be used at all times. Further, in the latter case investment and the capital stock are smaller than in the former one. Finally, there exists parameter values for which the computed difference in GDP is a factor of thirty.

Corporate governance and its influence on the investment decision process of equity market's professionals: An inside view of how corporate governance issues influence the decision-making process of sell-side and buy-side professionals when analyzing Brazilian listed companies

Corporate governance has been in the spotlight for the past two decades, being subject of numerous researches all over the world. Governance is pictured as a broad and diverse theme, evolving through different routes to form distinct systems. This scenario together with 2 types of agency problems (investor vs. management and minorities vs. controlling shareholders) produce different definitions for governance. Usually, studies investigate whether corporate governance structures influence firm performance, and company valuation. This approach implies investors can identify those impacts and later take them into consideration when making investment decisions. However, behavioral finance theory shows that not always investors take rational decisions, and therefore the modus operandi of those professionals needs to be understood. So, this research aimed to investigate to what extent Brazilian corporate governance standards and practices influence the investment decision-making process of equity markets' professionals from the sell-side and buy-side. This exploratory study was carried out through qualitative and quantitative approaches. In the qualitative phase, 8 practitioners were interviewed and 3 dimensions emerged: understanding, pertinence and practice. Based on the interviews’ findings, a questionnaire was formulated and distributed to buy-siders and sell-siders that cover Brazilian stocks. 117 respondents from all over the world contributed to the study. The data obtained were analyzed through structural equation modeling and descriptive statistics. The 3 dimensions became 5 constructs: definition (institutionalized governance, informal governance), pertinence (relevance), practice (valuation process, structured governance assessment) The results of this thesis suggest there is no definitive answer, as the extent to which governance will influence an investment decision process will depend on a number of circumstances which compose the context. The only certainty is the need to present a “corporate governance behavior”, rather than simply establishing rules and regulations at firm and country level.

Private equity regulation: what are the consequences of the alternative investment fund managers directive (AIFMD) on private equity managers?

The recent global financial crisis brought significant regulatory changes in the worldwide financial industry. In Europe and in the alternative asset sector specifically, a new regulation by the name of Alternative Investment Fund Managers Directive saw the daylight in 2010. This far-reaching and complex Directive with the main goal of regulating and overseeing alternative investment funds has triggered many discussions and represents an industry game-changer. Thus, this research will focus on the impact and consequences of the Directive on private equity fund managers and the role of regulators. In other words, what are the effects, what does that mean in a quantitative and qualitative sense, and how is it likely to influence the outlook of this asset class? In order to provide the reader with an extensive view on the topic, the paper will first discuss relevant theory and literature, using mix-methods and legal-dogmatic approaches. Further, descriptive case studies, analysis of existing surveys, and interviews with industry experts will supplement the paper in order to understand primary implications of the Directive with the goal of providing useful insights for further private equity regulation research.

Are returns on Foreign Direct Investment (FDI), FDI determinants?

Foreign Direct Investments (FDI) acquired an important role in the development process of the global economy. FDI inward stock was equivalent to an average of 32% of GDP for OECD countries in 2013. However, FDI affects a country’s Balance of Payments (BoP) in two ways: FDI flows are recorded in the BoP financial account while returns on FDI affect the BoP current account. Therefore, part of the positive contribution of inward FDI to a country on its financial account could be potentially offset by a negative contribution of FDI returns on the current account. The intent of this work is to complement the research on FDI determinants by introducing FDI returns as a variable in a gravity model where bilateral FDI outflows are the dependent variable. Moreover, using outward FDI flows as the dependent variable, the work allows looking at the behavior of Multinational Corporations (MNC) investing abroad. The results show that MNCs repatriate returns generating from the investments they make abroad. This is particularly true when high-income countries are involved: MNCs from high-income countries repatriate returns to their home countries from FDI made anywhere, while MNCs from middle-income countries repatriate returns from FDI in high-income countries. Repatriated returns are a relevant variable determining the value of FDI that a country makes in another country. The information on FDI returns is starting to become available to the public. This allows MNCs to sharpen their investment location decision models and national IPAs to better assess the two-fold BoP effects of promoting FDI.

The impact of corruption on the performance of state-owned companies: case of Petrobras Brasil

As empresas estatais são freqüentemente consideradas como componentes cruciais da economia de um país. Eles são responsáveis pela criação de vários postos de trabalho e proveem serviços essenciais que exigem um grande investimento de capital. Porém, em países com instituições fracas, onde a responsabilidade dos políticos é limitada e a gestão dos recursos financeiros das empresas estatais sofre pouco controle, os funcionários são muitas vezes tentados pela corrupção. Enormes quantidades de fundos públicos são facilmente desviados, e dinheiro que deveria ter sido investido nas despesas de capital, no pagamento de dívida da empresa ou no aumento do retorno para os acionistas, é usado para aumentar a riqueza privada de indivíduos ou para financiar ilegalmente partidos políticos. O desempenho da empresa sofre com essas alienações visto que parte dos lucros da empresa não são reinvestidos na empresa e dado que incentivos dos gestores estão desalinhados com os interesses dos acionistas. Petrobras, a maior empresa da América Latina em termos de ativos e receitas anuais, sofreu em 2014 e 2015 um escândalo de corrupção imenso, cujo impacto económico foi considerável, levando ao enfraquecimento da confiança de muitos investidores no Brasil após o evento. O escândalo expôs um extenso esquema de corrupção através do qual os contratantes foram conspirando para aumentar os preços de contratos de construção, com a aprovação da administração da Petrobras que pediu em troca ganhos pessoais ou fundos para o Partido dos Trabalhadores (PT). A exposição do escândalo na imprensa brasileira teve um grande impacto sobre a credibilidade da Petrobras: as contas da empresa estavam escondendo imensas irregularidades dado que a empresa tinha pago demais para os contratos de construção que não foram precificados no valor do mercado. Ao longo deste estudo, usamos o exemplo da Petrobras para ilustrar como a corrupção dentro empresas estatais prejudica o desempenho da empresa e como ela afeta as várias partes interessadas da empresa.