Shiva's dance: Crisis, local institutions and private firms

The uneven spatial distribution of start-ups and their respective survival may reflect comparative advantages resulting from the local institutional background. For the first time, we explore this idea using Data Envelopment Analysis (DEA) to assess the relative efficiency of Portuguese municipalities in this specific context. We depart from the related literature where expenditure is perceived as a desirable input by choosing a measure of fiscal responsibility and infrastructural variables in the first stage. Comparing results for 2006 and 2010, we find that mean performance decreased substantially 1) with the effects of the Global Financial Crisis, 2) as municipal population increases and 3) as financial independence decreases. A second stage is then performed employing a double-bootstrap procedure to evaluate how the regional context outside the control of local authorities (e.g. demographic characteristics and political preferences) impacts on efficiency.

Financial reporting and inventory disclosure in the extractive industry

Companies in the Extractive Industry (E.I) have some particularities and special regulation that provides an interesting study of inventory and reporting in their financial statements. The theme thus chosen here, aims to make a comparison of the various methods of reporting inventories (recognition, measurement, presentation and disclosures) as well as the different accounting regulations in place. Moreover, inventories are a current asset which represents a large per cent of total assets. Another is that it also provides an opportunity for analysis of the different regulations in place for disclosures; the different standards implemented- IAS, US GAAP and/or regional standards.

Banco BPI SA financial institutions

Equity research report

Cross-delisting, financial constraints and investment sensitivities

We investigate the impact of cross-delisting on firms’ financial constraints and investment sensitivities. We find that firms that cross-delisted from a U.S. stock exchange face stronger post-delisting financial constraints than their cross-listed counterparts, as measured by investment-to-cash flow sensitivity. Following a delisting, the sensitivity of investment-to-cash flow increases significantly and firms also tend to save more cash out of cash flows. Moreover, this increase appears to be primarily driven by informational frictions that constrain access to external financing. We document that information asymmetry problems are stronger for firms from countries with weaker shareholders protection and for firms from less developed capital markets.

Assessing the production of jet mix columns using alkali activated waste based on mechanical and financial performance and CO2 (eq) emissions

Recent research has proved the potential of alkaline activated fly-ash for soil stabilisation. However, such studies have not focused on the link between financial, mechanical and environmental aspects of this solution, but only on their absolute mechanical properties. The present paper characterises the mechanical behaviour of a large spectrum of activator-ash-soil combinations used to build jet mixing columns, analysing also the cost and CO2 (eq) emissions. The concern with these two vectors forced a decrease in the quantity of stabilising agent added to the soil, relatively to previous research, and the effects of such low quantities have not yet been published. However, the results clearly showed a significant improve in strength, still well above the average values expected when improving the stressstrain behaviour of a weak soil. Uniaxial compressive strength tests were used to assess the effects of the fly-ash percentage, the alkalieash ratio and the water content. The carbon calculator recently developed by the European Federation of Foundation Contractors and the Deep Foundations Institute was used to quantify the CO2 (eq) emissions associated with this technique. The financial cost was estimated based on the experience of a major Portuguese contractor. For comparison purposes, soil cement mixtures were also analysed, using similar conditions and tools used for the soil-ash analysis. Results showed that the cement and ash solutions are very similar in terms of overall performance, with some advantage of the former regarding financial cost, and a significant advantage of the latter regarding the CO2 (eq) emissions. This new grout, although it is in an embryonic stage, it has the potential for broader developments in the field.

Financial stress and sovereign debt composition

"Published online: 19 Oct 2015"

The real economic effects of cross-delistingfrom the united states: evidence on post-operating performance, financial constraints and stock crash risk

Tese de Doutoramento em Ciências Empresariais.

Political institutions and the development of telecommunications

It has traditionally been argued that the development of telecommunications infrastructure is dependent on the quality of countries' political institutions. We estimate the effect of political institutions on the diffusion of three telecommunications services and find it to be much smaller in cellular telephony than in the others. By evaluating the importance of institutions for technologies rather than for industries, we reveal important growth opportunities for developing countries and offer policy implications for alleviating differences between countries in international telecommunications development. Keywords: Political constraints, telecommunications, GMM, economic development. JEL codes: O1, O3.

Financial shocks and the US business cycle

Employing the financial accelerator (FA) model of Bernanke, Gertler and Gilchrist (1999) enhanced to include a shock to the FA mechanism, we construct and study shocks to the efficiency of the financial sector in post-war US business cycles. We find that financial shocks are very tightly linked with the onset of recessions, more so than TFP or monetary shocks. The financial shock invariably remains contractionary for sometime after recessions have ended. The shock accounts for a large part of the variance of GDP and is strongly negatively correlated with the external finance premium. Second-moments comparisons across variants of the model with and without a (stochastic) FA mechanism suggests the stochastic FA model helps us understand the data.

Financial liberalisation and industrial development in Malawi

It has been suggested that financial liberalisation may be a key policy to promote industrialisation as it removes the credit access constraint on firms, especially small and medium ones. We investigate the effect of credit expansion in the wake of liberalisation on the structure of the industrial sectors in Malawi and find that, in contrast to the hypothesis above, it resulted in an increase in industrial concentration and a decrease in net firm entry, especially in sectors that are more finance dependent. The case of Malawi is interesting because financial liberalisation has been justified precisely as a means for industrial development and because the implementation of the policy has been regarded as relatively successful.

Financial crisis and quantitative easing: can broad money tell us anything?

When Bank of England (and the Federal Reserve Board) introduced their quantitative easing (QE) operations they emphasised the effects on money and credit, but much of their empirical research on the effects of QE focuses on long-term interest rates. We use a flow of funds matrix with an independent central bank to show the implications of QE and other monetary developments, and argue that the financial crisis, the fiscal expansion and QE are likely to have constituted major exogenous shocks to money and credit in the UK which could not be digested immediately by the usual adjustment mechanisms. We present regressions of a reduced form model which considers the growth of nominal spending as determined by the growth of nominal money and other variables. These results suggest that money was not important during the Great Moderation but has had a much larger role in the period of the crisis and QE. We then use these estimates to illustrate the effects of the financial crisis and QE. We conclude that it would be useful to incorporate money and/or credit in wider macroeconometric models of the UK economy.

The response of the external finance premium in Asian corporate bond markets to financial characteristics, financial constraints and two financial crises

Empirical investigation of the external finance premium has been conducted on the margin between internal finance and bank borrowing or equities but little attention has been given to corporate bonds, especially for the emerging Asian market. In this paper, we hypothesize that balance sheet indicators of creditworthiness could affect the external finance premium for bonds as they do for premia in other markets. Using bond-specific and firm-specific data for China, Hong Kong, Indonesia, Korea, Philippines, Singapore and Thailand during 1995-2009 we find that firms with better financial health face lower external finance premia in all countries. When we introduce firm-level heterogeneity, we show that financial variables appear to be both statistically and quantitatively more important for financially constrained firms. Finally, when we examine the effects of the 1997-98 Asian crisis and the 2007-09 global financial crisis, we find that the sensitivity of the premium is greater for constrained firms during the Asian crisis compared to other times.

From Bretton Woods to inflation targeting: financial change and monetary policy evolution in Europe

Different ‘monetary architectures’ are distinguished, as a background to a discussion of the change in developed country monetary policy frameworks from fixed exchange rates under the Bretton Woods international monetary system to, ultimately, formal or informal inflation targeting. The introduction and experience of monetary targets in the 1970s is considered, followed by an analysis of the changes in countries’ monetary architectures, with particular reference to money and bond markets and to France and Italy, in the 1980s. Exchange rate targeting in Europe in the 1980s and 1990s is examined, followed by the changes in central bank independence in the 1990s. This leads to a discussion of the introduction of inflation targeting, and the issues raised for inflation targeting by the financial crisis of the late 2000s.