The Simple Economics of Conglomeration with Bankruptcy Costs: Separate or Joint Financing?

Which projects should be financed through separate non-recourse loans (or limited- liability companies) and which should be bundled into a single loan? In the pres- ence of bankruptcy costs, this conglomeration decision trades off the benefit of co- insurance with the cost of risk contamination. This paper characterize this tradeoff for projects with binary returns, depending on the mean, variability, and skewness of returns, the bankruptcy recovery rate, the correlation across projects, the number of projects, and their heterogeneous characteristics. In some cases, separate financing dominates joint financing, even though it increases the interest rate or the probability of bankruptcy.

Conglomeration with bankruptcy costs: Separate or joint financing?

The paper analyzes the determinants of the optimal scope of incorporation in the presenceof bankruptcy costs. Bankruptcy costs alone generate a non-trivial tradeoff between thebenefit of coinsurance and the cost of risk contamination associated to joint financing corporate projects through debt. This tradeoff is characterized for projects with binary returns,depending on the distributional characteristics of returns (mean, variability, skewness, heterogeneity, correlation, and number of projects), the bankruptcy recovery rate, and the taxrate advantage of debt relative to equity. Our testable predictions are broadly consistentwith existing empirical evidence on conglomerate mergers, spin-offs, project finance, andsecuritization.

A model of conglomeration and synergy traps

We present a model of conglomeration motivated by technology synergies and strategic reductions in variable costs in the face of competitive pressures. The resulting firm integration is neither horizontal nor vertical but rather congeneric integration of firms in related industries. We endogenize the industrial conglomeration structure and examine the effects of competition between conglomerates, and between a conglomerate and independent firms. We show that there is an equilibrium synergy trap in which conglomerates are formed to exploit economies of scope, but resulting profits are lower than under the status quo. We also show that strategic firm integration can occur even in the presence of diseconomies of scope. The model helps to explain features of recent mergers and acquisitions experience.

Aracnoidite Adesiva Lombar

Spinal arachnoiditis, an inflammatory process involving all three meningeal layers as well as the nerve roots, is a cause of persistent symptoms in 6% to 16% of postoperative patients. Although spinal surgery is the most common antecedent associated with arachnoiditis, multiple causes have been reported, including infection, intrathecal steroids or anesthetic agents, trauma, subarachnoid hemorrhage and ionic myelographic contrast material--both oil soluble and water soluble. In the past, oil-based intrathecal contrast agents (Pantopaque) were associated with arachnoiditis especially when this material was introduced into the thecal sac and mixed with blood. Arachnoiditis is apparently rarely idiopathic. The pathogenesis of spinal arachnoiditis is similar to the repair process of serous membranes, such as the peritoneum, with a negligible inflammatory cellular exudate and a prominent fibrinous exudate. Chronic adhesive arachnoiditis of the lower spine is a myelographic diagnosis. The myelographic findings of arachnoiditis were divided into two types by Jorgensen et al. In type 1, "the empty thecal sac" appearance, there is homogeneous filling of the thecal sac with either absence of or defects involving nerve root sleeve filling. In type 2 arachnoiditis, there are localized or diffuse filling defects within the contrast column. MRI has demonstrated a sensitivity of 92% and a specificity of 100% in the diagnosis of arachnoiditis. The appearance of arachnoiditis on MRI can be assigned to three main groups. The MRI findings in group I are a conglomeration of adherent roots positioned centrally in the thecal sac. Patients in group II show roots peripherally adherent to the meninges--the so called empty sac. MRI findings in group III are a soft tissue mass within the subarachnoid space. It corresponds to the type 2 categorization defined by Jorgensen et al, where as the MRI imaging types I and II correspond to the myelographic type 1.

Regulating financial conglomerates

We investigate the optimal regulation of financial conglomerates which combinea bank and a non-bank financial institution. The conglomerate s risk-taking incentivesdepend upon the level of market discipline it faces, which in turn isdetermined by the conglomerate s liability strucure. We examine optimal capitalrequirements for standalone institutions, for integrated financial conglomerates,and for financial conglomerates that are structured as holding companies.For a given risk profile, integrated conglomerates have a lower probability offailure than either their standalone or decentralised equivalent. However, whenrisk profiles are endogenously selected conglomeration may extend the reachof the deposit insurance safety net and hence provide incentives for increasedrisk-taking. As a result, integrated conglomerates may optimally attract highercapital requirements. In contrast, decentralised conglomerates are able to holdassets in the socially most efficient place. Their optimal capital requirementsencourage this. Hence, the practice of regulatory arbitrage , or of transferingassets from one balance sheet to another, is welfare-increasing. We discuss thepolicy implications of our finding in the context not only of the present debateon the regulation of financial conglomerates but also in the light of existingUS bank holding company regulation.

Essais en économie avec frictions financières

Les trois essais dans cette thèse étudient les implications des frictions financières, telles que les contraintes de collatérale ou de crédit, pour les décisions économiques des agents et leur impact sur les variables macro-économiques agrégées. Dans le premier chapitre "Financial Contracts and the Political Economy of Investor Protection" nous proposons une théorie du niveau de protection des investisseurs. Une faible protection des investisseurs implique un coût de financement externe plus élevé à cause des problèmes d'agence plus aigus entre les investisseurs et les entrepreneurs. À l'équilibre, ceci exclut les agents plus dépendants sur le financement externe de l'entrepreneuriat, ce qui augmente les profits des entrepreneurs qui restent actifs. Quand le niveau de la protection des investisseurs est choisi par un vote majoritaire, la théorie génère (i) une protection des investisseurs plus faible dans les économies avec plus grande inégalité dans les besoins de financement externe parmi les entrepreneurs, (ii) une dynamique non-monotone de l'output, (iii) améliorations (détériorations) de la protection des investisseurs suite à des ralentissements (accélérations) de l'output agrégé. L'évidence empirique donne un support à ces prédictions de la théorie. Dans le deuxième chapitre "Financial Frictions, Internal Capital Markets, and the Organization of Production", nous examinons comment la présence des frictions financières peut mener à la formation des conglomérats et des "business groups" diversifiées. Particulièrement, nous construisons un modèle d'équilibre général d'entrepreneuriat dans lequel les conglomérats émergent de façon endogène et substituent partiellement le marché du crédit imparfait. Nous montrons que ce modèle est capable d'expliquer quantitativement plusieurs faits stylisés concernant l'organisation de la production, les différences de productivité entre les firmes et les différences en présence des conglomérats entre les pays. Le troisième chapitre "Size and Productivity of Single-segment and Diversified Firms: Evidence from Canadian Manufacturing" étudie empiriquement la relation entre la taille, la productivité, et la structure organisationnelle d'une firme. Utilisant les micro-données sur les établissements manufacturiers canadiens, nous documentons plusieurs faits stylisés concernant la taille et la productivité totale des facteurs des établissements dans les conglomérats et dans les firmes non-diversifiées. Nous trouvons que les établissements dans les conglomérats sont en moyenne plus larges que leurs contreparties dans les firmes non-diversifiées, les petits établissements dans les conglomérats sont moins productifs que les établissements de taille similaire dans les firmes non-diversifiées, mais les larges établissements dans les conglomérats sont plus productifs que ceux de taille similaire dans les firmes non-diversifiées. Cette évidence est consistante avec réallocation interne efficiente des ressources au sein des conglomérats.

La banque d'investissement et la conglomération du secteur financier : une multiplicité d'intérêts en quête d'équilibre

Jouant un rôle crucial pour l’efficience des marchés, la banque d’investissement contemporaine se caractérise par l’exercice d’une grande diversité d’activités aussi complexes qu’hétérogènes sous un même toit. Agissant tantôt auprès d’une clientèle de particuliers, d’entreprises, d’institutions financières, de fonds d’investissement ou de gouvernements, et tantôt pour son propre compte, elle compose avec une multitude d’intérêts divergents, ce qui soulève un certain questionnement quant à la portée de l’obligation de loyauté dont elle peut être tributaire envers ses clients. Les implications répétées des banques d’affaires dans la vague de récents scandales financiers ont inévitablement affecté la confiance que les épargnants témoignent envers l’intégrité de cette institution et des marchés financiers en général. Elles ont de plus contribué significativement à relancer le débat concernant la pertinence de contrôler, et même d’éliminer les conflits d’intérêts, un phénomène largement répandu au sein de la banque d’investissement. À titre de mécanismes préventifs, les solutions de marchés et l’autodiscipline des intermédiaires financiers sont imparfaits. La réglementation des conflits d’intérêts se justifie alors afin de pallier les défaillances du marché et de l’autorégulation. Pour autant qu’il maintienne sa réglementation dans un rapport efficience-équité acceptable, l’État est appelé à concevoir des normes de contrôle aux objectifs variés, allant de la réforme structurelle du secteur financier à l’élaboration de principes généraux devant servir de balises à la conduite des intermédiaires financiers. Ainsi, dans une industrie caractérisée par une forte conglomération, la réponse des législateurs semble s’articuler autour du traitement adéquat des conflits d’intérêts, traitement qui s’opère par divers mécanismes, dont la muraille Chine, la divulgation et le refus d’agir.

Determinantes dos impactos sobre a estrutura de mercado brasileira das fusões e aquisições recentes

O objetivo deste artigo é analisar o recente processo de fusões e a aquisições na economia brasileira, no tocante aos seus impactos sobre a concentração. Busca-se verificar correlações entre a natureza da operação e algumas variáveis econômicas referentes às empresas envolvidas. Através de dados dos relatórios de julgamento dos atos de concentração do Conselho Administrativo de Defesa Econômica (CADE) e dos pareceres econômicos formulados pela Secretaria de Acompanhamento Econômico do Ministério da Fazenda (SEAE), realiza-se um estudo econométrico através do modelo logit. A suposição é de que operações de natureza horizontal possuem efeitos prejudiciais maiores sobre a concentração de mercado do que as de natureza vertical e/ou conglomerado. O resultado obtido mostra que a desnacionalização de empresas e as operações ocorridas em alguns setores aumentam a concentração, enquanto que nas operações de abrangência mundial este efeito é menor.

Assessing competition in banking industry: a multiproduct approach

This paper aims to investigate the competition aspects of banking multiproduct operation. Based on an extension of Panzar and Rosse (1987)’s test to the case of a multiproduct banking firm, we take advantage of a new dataset constructed to Brazilian banking conglomerates to infer the impact of conglomeration on market power. We find that banks offering classic (i.e., loans and credit cards) and other bank products (i.e., brokerage services, insurance and capitalization bonds) have substantially higher market power than the ones which offer only classic products. Results suggest a positive bias on the traditional estimates of competition in which the multioutput actions are not taken into account.

Assessing competition in the banking industry: a multi-product approach

This paper investigates the competitive aspects of multi-product banking operations. Extending Panzar and Rosse (1987)’s model to the case of a multi-product banking firm, we show that the higher the economies of scope in multi-product banking are, the lower Panzar-Rosse’s measure of competition in the banking sector is. To test this empirical implication and determine the impact of multi-production/conglomeration on market power, we use a new dataset on Brazilian banking conglomerates. Consistent with our theoretical prediction, we find that banks offering classic banking products (i.e., loans and credit cards) and other banking products (i.e., brokerage services, insurance and capitalization bonds) have substantially higher market power than banks that offer only classic products. These results suggest a positive bias in the traditional estimates of competition in which multi-output actions are not considered.

Cidadão em sintonia participativa: uma perspectiva para as Relações Públicas

In contemporary times, to which the media is centralized in the hands of a few, it is necessary to understand and discuss its democratization. In this situation it surges a theory that is still maturing, Communication Public, which reflects the communication by the optic of citizen participation. In this sense, the research has as objective the reflection about democracy, the centrality and conglomeration media in society and what is affecting public broadcast organizations. So has too the intention to defend the performance of professional public relations in this context, due to its humanistic and strategic characteristic. Through literature review, observation of programming of Radio FM UNESP Bauru and interviews with employees, it is perceived that the vehicle radio for its intrinsic characteristics has great potential democratization, when this character in public can promote citizenship. There was also observed the demand for professional public relations, assisting the organization to recognize themselves as a social institution, defining its mission, its goals, its vision and policies, with objective to make two-way symmetrical communication to the public

O engavetamento de modelos de ensino superior dentro da universidade pública

This paper explores the contradictions between models conflicting today in Brazilian universities. The conglomeration of isolated institutions, integrated and multifunctional university and university-enterprise, service provider. This last model attempts to integrate higher education institutions to supply chains dominated by capital. Public universities were designed to provide innovative services and train staff researchers for such activity. The training of skilled workforce would be fundamentally task of private universities. But in any case, the onus would be on this training students. This model has been driven from the 1990s, with "instruction manuals" of the World Bank, and in 2000, with the IMF recommendations and, in the case of Latin American universities, Fundación Universia, sponsored by the Santander Bank. The question remains: the university will be able to organize the productive forces which have around research goals and staff training for independent development.

The changing values of children and preferences regarding family size in south Africa

This study extends the ongoing studies on values of children and intergenerational relations into an African context with the following key questions: To what extent can the structure of values of children (VOC) identified in previous studies be found in South Africa and what are women's preferences regarding the size of small, large, and ideal families? The sample consisted of three cohorts of Black South African women from the Limpopo Province. Factor analyses showed that the dimensions of VOC found in South Africa are a conglomeration of different values. Identified dimensions were Social/Emotional and Traditional/Utilitarian with respect to reasons for wanting children. Regarding reasons for not wanting children, Child as Source of Constraints and Constraints to Have a Child were identified. Intergenerational comparisons showed variations in the importance of value of children dimensions and in preferences regarding family size. Values of children of younger mothers were related to the number of children these women had and to their preferences regarding family size. The findings are discussed within the changing socio-political context of South Africa.

Alta velocidad ferroviaria en California(USA): tercera parte (III) Fresno-Los Ángeles-San Diego = High speed railway in California(USA): third part (III) Fresno-Los Ángeles-San Diego

Implantación de la Red de Alta velocidad Ferroviaria en California. Tramo Fresno-Los Angeles-San Diego. Este artículo, tercera parte de la serie que describe la red de Alta Velocidad Ferroviaria de California (CHSRS), se ocupa de la línea Fresno-Los Angeles Airport-San Diego Airport, con el trazado propuesto en la Alternativa Missions Trail del Proyecto FARWEST, caracterizada por el paso directo de las montañas de Tehachapi, mediante dos grandes túneles de 27,5 Km (17 mile) y 25,6 Km (15,9 mile) de longitud. También por el emplazamiento de la estación terminal de Los Angeles, junto al Aeropuerto Internacional de Los Angeles y la sustitución de la circunvalación ferroviaria de la aglomeración urbana de Los Angeles, a través de Inland Empire, por el ramal Anaheim-Riverside, que da acceso a esa región, y que es cabecera de la futura Dessert Express a Las Vegas. The third of a series describing the California High Speed Railway (CHSRS), this article refers to the Fresno-Los Angeles Airport-San Diego Airport line, with the alignment as proposed in the Missions Trail Alternative of the FARWEST Project, characterized by the direct Tehachapi mountain pass through two large tunnels 27.5 Km (17 miles) and 25.6 Km (15.9 miles) long and also to the siting of the Los Angeles terminal station next to the Los Angeles International Airport and the replacement of the Los Angeles urban conglomeration railway by-pass through Inland Empire, by the Anaheim-Riverside branch providing access to that region and which is the head of the future Desert Express to Las Vegas.