Earnings management and economic crises in the brazilian capital market

The 2008 economic crisis challenged accounting, either demanding recognition and measurement criteria well adjusted to this scenario or even questioning its ability to inform appropriately entities' financial situation before the crisis occurred. So, our purpose was to verify if during economic crises listed companies in the Brazilian capital market tended to adopt earnings management (EM) practices. Our sample consisted in 3,772 firm-years observations, in 13 years - 1997 to 2009. We developed regression models considering discretionary accruals as EM proxy (dependent variable), crisis as a macroeconomic factor (dummy variable of interest), ROA, market-to-book, size, leverage, foreign direct investment (FDI) and sector as control variables. Different for previous EM studies two approaches were used in data panel regression models and multiple crises were observed simultaneously. Statistics tests revealed a significant relation between economic crisis and EM practices concerning listed companies in Brazil in both approaches used.

Are sustainable companies less risky and more profitable?

The purpose of this study was to determine whether there were significant differences in accounting indicators when comparing sustainable enterprises to other similar companies that are not considered as sustainable. The Corporate Sustainability Index of BM (São Paulo Stock, Commodities and Futures Exchange) was the criterion selected to break down the samples into sustainable and non-sustainable enterprises. The accounting indicators were separated into two kinds: risk (dividend payout, percentage growth of assets, financial leverage, current liquidity, asset size, variability of earnings, and accounting beta) and return (ROA, ROE, asset turnover, and net margin). We individually analyzed the companies in the energy sector, followed by those in the banking sector, as well as the entire ISE portfolio as of 2008/2009, including all the sectors. Mann-Whitney tests were performed in order to verify the difference of the means between the groups (ISE and non-ISE). The results, considering the method chosen and the time span covered by the study, indicate that there are no differences between sustainable companies and the others, when they are assessed by the accounting indicators used here.

Quimiometria I: calibração multivariada, um tutorial

The aim of this work is to present a tutorial on Multivariate Calibration, a tool which is nowadays necessary in basically most laboratories but very often misused. The basic concepts of preprocessing, principal component analysis (PCA), principal component regression (PCR) and partial least squares (PLS) are given. The two basic steps on any calibration procedure: model building and validation are fully discussed. The concepts of cross validation (to determine the number of factors to be used in the model), leverage and studentized residuals (to detect outliers) for the validation step are given. The whole calibration procedure is illustrated using spectra recorded for ternary mixtures of 2,4,6 trinitrophenolate, 2,4 dinitrophenolate and 2,5 dinitrophenolate followed by the concentration prediction of these three chemical species during a diffusion experiment through a hydrophobic liquid membrane. MATLAB software is used for numerical calculations. Most of the commands for the analysis are provided in order to allow a non-specialist to follow step by step the analysis.

QSAR modeling: um novo pacote computacional open source para gerar e validar modelos QSAR

QSAR modeling is a novel computer program developed to generate and validate QSAR or QSPR (quantitative structure- activity or property relationships) models. With QSAR modeling, users can build partial least squares (PLS) regression models, perform variable selection with the ordered predictors selection (OPS) algorithm, and validate models by using y-randomization and leave-N-out cross validation. An additional new feature is outlier detection carried out by simultaneous comparison of sample leverage with the respective Studentized residuals. The program was developed using Java version 6, and runs on any operating system that supports Java Runtime Environment version 6. The use of the program is illustrated. This program is available for download at lqta.iqm.unicamp.br.

Innovation, competition and financial vulnerability in economic development

The financial sector has been viewed traditionally as either providing the "oil" for the "wheels of commerce" or as a parasite on the real sector of the economy where real productivity gains provide for increasing real wages and per capita incomes. The present paper takes a different route and attempts to an analysis of financial institutions on a par with the production sector of the economy. It also develops a link which amalgamates "the knowledge-based" perspective on firms' operations with Schumpeterian financial leverage to exploit productivity enhancing innovations, and Minsky's tendency towards financial fragility. The analysis also leads to some policy recommendations concerning financial regulation, risk management and financial institution's building.

Iceland's meltdown: the rise and fall of international banking in the North Atlantic

This paper shows how rapid privatization and liberalization of Iceland's small local banks around 2000, combined with well-developed crony relations among the elite, enabled a small group of financiers to leverage government-guaranteed deposits into a vast wave of mergers and acquisitions abroad, and redistribute enough of the profits back home to make the economy boom. Negative policy feedback loops were systematically undermined. The incoming left-wing government, with IMF support, has managed to protect the bulk of the population from the worst of the effects.