A model of capital accumulation and rent-seeking

A simple model incorporating rent-seeking into the standard neoclassical model of capital accumulation is presented. It embodies the idea that the performance of an economy depends on the efficiency of its institutions. It is shown that welfare is positively affected by the institutional efficiency, although output is not necessarily so. It is also shown that an economy with a monopolistic rent-seeker performs better than one with a competitive rent-seeking industry.

Country factors and the dynamic modeling of capital structure : an empirical study of latin american firms

Desenvolvemos modelos de ajuste parcial e de duration para testar a relevância de fatores específicos de países na determinação da estrutura de capital de empresas listadas nas bolsas de valores brasileira, chilena e mexicana. Utilizamos dados em painel, em um período que se estende do quarto trimestre de 1996 ao segundo trimestre de 2010, abrangendo 4403 observações relacionadas a 139 empresas diferentes. Os resultados obtidos sugerem que a dinâmica da estrutura de capital varia por país e que idiossincrasias locais são determinantes-chave dos níveis de alavancagem das empresas. Não detectamos comportamento explicado pela Teoria de Trade Off entre as empresas brasileiras, chilenas e mexicanas, o que indica que teorias alternativas possam comandar os processos de decisão de financiamento dos gestores latino americanos.

Speed of adjustment of capital structure: empirical study

We analyze the impact of firm-specific characteristics as well as economic factors on the speed of adjustment to the target debt ratio. Using different methods, we document speeds of adjustment ranging from 14.4% to 37%. The results indicate that the speed of adjustment is affected by business-cycle variables: The interaction term related to term spread reveals, as expected, faster adjustment in booms than in recessions and a negative relationship between short term spread and adjustment speed. We also show that the speed of adjustment becomes stationary when the increasing fractions of zero-debt firms are considered.

Beyond ‘best practices': the international regulation of capital markets

It is widely acknowledged that there is considerable international pressure for international ‘best practices’ to be adopted via national legislation. This would occur either by means of model laws or through the passing of country specific legislation that closely replicates foreign legal formats, administrative rules, and or regulation. These attempts to spread the implementation of ‘best practices’ have gained importance in the international debate due to the liberalization of international capital flows. The oversight, country reports, and technical assistance carried out by international organizations along with the growing internationalization of investors have also contributed to this growing pressure. In this respect, due to the constant evolution of transactions and the end objective of making sure that capital markets are developed with just rules, structures, and methods, this article looks to analyze the adoption of standardized models of capital market regulation. Furthermore it looks to examine the motivation and interest of states and other ‘stakeholders’ at the international level.

Effects of capital structure on markups and competitive performance : evidence from Portugal

Este estudo avalia os efeitos da estrutura de capital nas margens de lucro e no desempenho competitivo. Aplica teorias relativas à contra ciclicidade das margens de lucro, e aos resultados do mercado do produto de Chevalier e Scharfstein (1996), a dados portugueses, seguindo a metodologia de Campello (2001). Utilizando dados de painel de empresas pertencentes à indústria transformadora Portuguesa, a análise fornece evidencia para a contra-ciclicidade de margens de lucro e de um efeito conjunto de dívida e recessão económica nas margens de lucro. Tendo por base o recenseamento de empresas Portuguesas, a análise não fornece evidência de uma relação significativa entre a estrutura de capital e o desempenho competitivo.

The spenders-hoarders theory of capital accumulations, wealth distribution and fiscal policy

This paper proposes a simple OLG model which is consistent with the essential facts about consumer behavior, capital accumulation and wealth distribution, and yields some new and surprising conclusions about fiscal policy. By considering a society in which individuais are distinguished according to two characteristics, altruism and wealth preference, we show that those who in the long run hold the bulk of private capital are not so rnuch motivated by dynastic altruism as by preference for wealth. Two types of social segmentation can result with different wcalth distribution. To a large extcnt our results seem to fit reality better than those obtained with standard optimal growth models in which dynastic altruism ( or r ate o f impatience) is the only source of heterogeneity: overaccumulation can appear, public debt and unfunded pensions are not neutra!, estate taxation can improve the welfare of the top wealthy.