Empirical evidence of trade credit uses of brazilian publicly-listed companies

This research provides empirical evidence on the use of trade credit as either a substitution or a complement to bank debt for listed companies in Brazil, controlling for the firms reputation, as stated by Alphonse, Ducret and Séverin (2006). The sample consists of 263 publicly-listed companies for 2006. Our findings support all three hypotheses. We provide evidence that trade credit may be used as a signal for the firm’s quality.

Corporate social responsibility and environmental sustainability: classification of the initiatives of the FMCG companies operating in Brazil

Este trabalho tem como objetivo fornecer uma análise detalhada do cenário da sustentabilidade ambiental e iniciativas de responsabilidade social corporativa nas empresas que operam no mercado de bens de consumo brasileiro. Para alcançar este objetivo as dez maiores empresas do mercado-alvo presente no Brasil foram analisadas por meio da classificação das suas iniciativas em três perspectivas amplas. Com esta classificação o cenário do mercado pode ser visto. As perspectivas utilizadas para a elaboração do trabalho são: (1) iniciativa ambiental ou social; (2) o foco interno ou externo e (3) a marca ou o custo como motivador. Depois de classificar todas as iniciativas, foi possível ver que as empresas similares, que operam em mercados semelhantes, têm estratégias que são muito parecidos entre si. Além disso, ficou claro que a estratégia de negócios da empresa influencia as suas políticas ambientais e sociais, em particular os objetivos que estas políticas procuram obter.Embora este trabalho apresente um panorama abrangente do setor de bens de consumo em relação a políticas de comportamento responsável das empresas, ele tem algumas limitações. A limitação mais significativa diz respeito a metodologia. As iniciativas foram avaliadas pela quantidade e a abrangência dos benefícios do impacto positivo não foram avaliados, impossibilitando assim a comparação do tamanho do impacto de cada empresa. Uma vez que pode haver um projeto de uma empresa que tem maior impacto do que vários outros feitos por alguma outra empresa. A metodologia foi baseada em clusters de categorias, no entanto, as iniciativas não são completamente uma coisa ou outra, ou seja, uma iniciativa pode ter diferentes impactos, drivers ou foco, nesses casos, os aspectos mais relevantes foram a escolhidos para classificá-los.

A comparative study of the credit card market dynamics in Mexico and Brazil

This research analyzes and compares the attractiveness of the Brazilian and Mexican credit card markets from a financial firm’s perspective. The market dynamics in Latin America’s two economic powerhouses are fleshed out with qualitative and quantitative data, using a strategic framework to structure the analysis. Since its adoption by both countries in 1956, credit card usage has experienced many years of double digit growth. However, penetration levels remain low compared with most developed countries. Brazil has a more developed credit card infrastructure, with more potential profit, and issuers might face fewer competitive challenges.  Alternatively, Mexico, is witnessing a more favorable economy, a friendlier business and regulatory environment, combined with fewer financial products that compete with the credit card. Therefore, this paper concludes that Brazil and Mexico both offer market opportunities for credit card companies that can navigate the different technological, demographic, macroeconomic, and regulatory shifts in each country.

Essays on the credit channel of monetary policy: a case study for Brazil

The onset of the financial crisis in 2008 and the European sovereign crisis in 2010 renewed the interest of macroeconomists on the role played by credit in business cycle fluctuations. The purpose of the present work is to present empirical evidence on the monetary policy transmission mechanism in Brazil with a special eye on the role played by the credit channel, using different econometric techniques. It is comprised by three articles. The first one presents a review of the literature of financial frictions, with a focus on the overlaps between credit activity and the monetary policy. It highlights how the sharp disruptions in the financial markets spurred central banks in developed and emerging nations to deploy of a broad set of non conventional tools to overcome the damage on financial intermediation. A chapter is dedicated to the challenge face by the policymaking in emerging markets and Brazil in particular in the highly integrated global capital market. This second article investigates the implications of the credit channel of the monetary policy transmission mechanism in the case of Brazil, using a structural FAVAR (SFAVAR) approach. The term “structural” comes from the estimation strategy, which generates factors that have a clear economic interpretation. The results show that unexpected shocks in the proxies for the external finance premium and the credit volume produce large and persistent fluctuations in inflation and economic activity – accounting for more than 30% of the error forecast variance of the latter in a three-year horizon. Counterfactual simulations demonstrate that the credit channel amplified the economic contraction in Brazil during the acute phase of the global financial crisis in the last quarter of 2008, thus gave an important impulse to the recovery period that followed. In the third articles, I make use of Bayesian estimation of a classical neo-Keynesian DSGE model, incorporating the financial accelerator channel developed by Bernanke, Gertler and Gilchrist (1999). The results present evidences in line to those already seen in the previous article: disturbances on the external finance premium – represented here by credit spreads – trigger significant responses on the aggregate demand and inflation and monetary policy shocks are amplified by the financial accelerator mechanism. Keywords: Macroeconomics, Monetary Policy, Credit Channel, Financial Accelerator, FAVAR, DSGE, Bayesian Econometrics

The effects of credit risk transfer on bank monitoring and firm financing

This paper examines the efects of the transfer of credit risk associated with bank loans. We are interested in (a) whether the transfer of credit risk has any impact on the intensity with which banks monitor their borrowers and (b) whether credit risk transfer infuences the amount of financing that is provided to firms in an economy. Our model first develops conditions under which bank finance is available to firrms, mainly in the spirit of Holmstrom/Tirole (1997). We then introduce projects with uncorrelated pay-offs and argue that one possible economic rationale for credit risk transfer is diversi¯cation. We analyze whether and how within this scenario the transfer of the credit risk of loans changes a bank's incentives to monitor its debtors. Finally we investigate whether and what kind of impact this may have on the amount of ¯nancing available to firms in an economy. Our results indicate that the monitoring incentives are being eroded indeed and that credit risk transfer can increase the overall amount of obtainable funds in an economy.

Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina

The paper provides evidence on what affects at the margin the cost and availability of bank credit for firms in Argentina. We study in particular how banks use different pieces of private and public information to screen firms and overcome informational asymmetries in the credit market. Some private information is transferable, like balance sheet data. Private information generated in relationships is not. To capture the closeness of bank relationships, we resort to the concentration of bank credit and the number of credit lines in a bank. We also consider public information available in the Central de Deudores. The cost of credit is measured using overdrafts, the most expensive line of credit, at the bank that charges the highest rate for overdrafts. We find that the cost of credit is smaller for a firm with a close relationship to the marginal bank. Firms with large assets, a high sales/assets ratio, and a low debt/assets ratio pay a lower interest rate at the margin. A good credit history (no debt arrears and no bounced checks) and collateral also reduce the marginal interest rate. The availability of credit is measured by unused credit lines as a proportion of total liabilities with the main bank. The availability of credit depends positively on a close relationship with the main bank. Large assets, a high return over assets, a high sales/assets ratio, a low debt/assets ratio, a good credit history, and collateral lead to higher credit availability. Our measure of unused credit lines is less ambiguous than traditional measures like leverage, which may indicate financial distress rather than availability of credit.