Two Essays on the economics of Education

We develop a job-market signaling model where signals may convey two pieces of information. This model is employed to study the GED exam and countersignaling (signals non-monotonic in ability). A result of the model is that countersignaling is more expected to occur in jobs that require a combination of skills that differs from the combination used in the schooling process. The model also produces testable implications consistent with evidence on the GED: (i) it signals both high cognitive and low non-cognitive skills and (ii) it does not affect wages. Additionally, it suggests modifications that would make the GED a more effective signal.

The stakeholders‟ involvement in the process of building and maintaining a destination brand

A destination is a place that attracts visitors for a temporary stay to participate in tourism related activities or non- activities. Globalization, the increased number of travelers and the increased buying power have increased the competition between the destinations and the destinations have become more substitutable. It has been agreed that destinations can be branded as well as products and to be competitive it is getting common to brand destinations. Destination Marketing Organizations (DMOs) are responsible for the marketing of an identifiable destination. The purpose of this study is to present an exploratory study of how a destination marketing organization creates and builds a strong destination brand and how the stakeholders have been involved in the process. The study is done with a qualitative case study approach. The case study was chosen as the research method to make a detailed and intensive analysis of the research objective, in this case the destination brand of Brazil and its stakeholders.

The costs of education, longevity and the poverty of nations

This paper explores the distortions on the cost of education, associated with government policies and institutional factors, as an additional determinant of cross-country income differences. Agents are finitely lived and the model takes into account life-cycle features of human capital accumulation. There are two sectors, one producing goods and the other providing educational services. The model is calibrated and simulated for 89 economies. We find that human capital taxation has a relevant impact on incomes, which is amplified by its indirect effect on returns to physical capital. Life expectancy plays an important role in determining long-run output: the expansion of the population working life increases the present value of the flow of wages, which induces further human capital investment and raises incomes. Although in our simulations the largest gains are observed when productivity is equated across countries, changes in longevity and in the incentives to educational investment are too relevant to ignore.

An essay about the effect of vague accounting standards on the decision making process of auditors

Vague words and expressions are present throughout the standards that comprise the accounting and auditing professions. Vagueness is considered to be a significant source of inexactness in many accounting decision problems and many authors have argued that the neglect of this issue may cause accounting information to be less useful. On the other hand, we can assume that the use of vague terms in accounting standards is inherent to principle based standards (different from rule based standards) and that to avoid vague terms, standard setters would have to incur excessive transaction costs. Auditors are required to exercise their own professional judgment throughout the audit process and it has been argued that the inherent vagueness in accounting standards may influence their decision making processes. The main objective of this paper is to analyze the decision making process of auditors and to investigate whether vague accounting standards create a problem for the decision making process of auditors, or lead to a better outcome. This paper makes the argument that vague standards prompt the use of System 2 type processing by auditors, allowing more comprehensive analytical thinking; therefore, reducing the biases associated with System 1 heuristic processing. If our argument is valid, the repercussions of vague accounting standards are not as negative as presented in previous literature, instead they are positive.

The family role on the internationalization process of family businesses: a two-case study

Essa dissertação procura identificar o papel da família no processo de internacionalização de dois negócios familiares: JBS, a maior empresa de proteína animal do mundo e Cutrale um dos líderes mundiais no mercado de suco de laranja. Empresas familiares possuem características que são intrínsecas a esse tipo de empresa. Muitos dos motivos de se internacionalizar ou mesmo o modo como eles se internacionalizam podem ser extremamente característicos. Assim, através de uma pesquisa qualitativa, os dois estudos de caso foram analisados baseados em teorias de internacionalização de empresas familiares. Porém, nessas companhias estudadas, a família não desempenhou um papel relevante no processo de internacionalização das mesmas. Com esses resultados, questões surgiram, como por exemplo, se o tamanho ou segmento da empresa tiveram um impacto na importância do papel que a família possui no processo de internacionalização. Essas questões não eram o foco do estudo porém fornecem muitos subsídios para uma próxima pesquisa.

The impact of structured teaching methods on the quality of education

This paper estimates the impact of the use of structured methods on the quality of education of the students in primary public school in Brazil. Structure methods encompass a range of pedagogical and managerial instruments applied to the education system. In recent years, several municipalities in the State of São Paulo have contracted out private educational providers to implement these structured methods in their schooling system. Their pedagogical proposal involves structuring curriculum contents, elaboration and use of teachers and students textbooks, and training and supervision of the teachers and instructors. Using a difference in differences estimation strategy, we find that the fourth and eighth grader students in the municipalities with structured methods performed better in Portuguese and Math than students in municipalities not exposed to the methods. We find no differences in approval rates. However, a robustness check is not able to discard the possibility that unobserved municipal characteristics may affect the results.

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.

Accountability and yardstick competition in the public provision of education

This paper explores the institutional change introduced by the public disclosure of an education development index (IDEB, Basic Education Development Index) in 2007 to identify the e ect of education accountability on yardstick competition in education spending for Brazilian municipalities. Our results are threefold. First, political incentives are pervasive in setting the education expenditures. The spatial strategic behavior on education spending is estimated lower for lame-ducks and for those incumbents with majority support at the city council. This suggests a strong relation between commitment and accountability which reinforces yardstick competition theory. Second, we nd a minor reduction (20%) in spatial interaction for public education spending after IDEB's disclosure | compared to the spatial correlation before the disclosure of the index. This suggests that public release of information may decrease the importance of the neighbors` counterpart information on voter`s decision. Third, exploring the discontinuity of IDEB`s disclosure rule around the cut-o of 30 students enrolled in the grade under assessment, our estimates suggest that the spatial autocorrelation | and hence yardstick competition | is reduced in 54%. Finally, an unforeseen result suggests that the disclosure of IDEB increases expenditures, more than 100% according to our estimates.

Winning in Brazil: how institutional voids affect the entry decision making process of foreign venture capital firms coming to Brazil

The master thesis for the achievement of the academic status master of science in international management (MPGI) will aim to solve the research question of how institutional voids affect the entry decision-making process of foreign venture capital firms coming to Brazil. This is a timely matter since in the past years there has been a sudden eruption of foreign VC involvement in Brazil. Based on the actionable framework by Khanna and Palpeu (2010) we conducted quantitative as well as qualitative research with two sets of interview partners in a two-phase analysis. We interviewed experts from VC firms, foreign VC firms based in Brazil and perspective VC firms that are looking to come to Brazil. We started with the former, derived lessons learned and analyzed how they affect the latter in reaching a decision. As we expected we found that depending on the industry that ventures are in, institutional voids can either pose an opportunity or a threat and hence attract or push away potential VC firms entering Brazil. Opportunities exist especially when exploiting institutional voids, for example through ventures in the marketplace efficiency. Threats are posed by investments in for instance hard infrastructure, where the economic, political and judicial systems as well as corruption and bureaucracy play demanding roles.