Regional Diversification and Performance: Conceptualization and Competing Strategic Objectives

This dissertation comprised of three essays provides justification for the need to pursue research on multinationality and performance with a more fine-grained approach. Essay one is a conceptual response to an article written by Jean-Francois Hennart in 2011 which questions the need and approach toward future research in this domain. I argue that internalization theory does not render multinationality and performance research meaningless and identify key areas where methodological enhancements can be made to strengthen our research findings with regard to Hennart’s call for more content validity. Essay two responds to the need for more-fine grained research on the consequences of multinationality by introducing non-traditional measures of performance such as social and environmental performance and adopting a more theoretically relevant construct of regionalization to capture international diversification levels of the firm. Using data from the world’s largest 600 firms (based on sales) derived from Bloomberg and the Directory of Corporate Affiliates; I employ general estimating equation analysis to account for the auto-correlated nature of the panel data alongside multivariate regression techniques. Results indicate that regionalization has a positive relationship with economic performance while it has a negative relationship with environmental and social performance outcomes, often referred to as the “Triple Bottom-Line” performance. Essay three builds upon the work in the previous essays by linking the aforementioned performance variables and sample to corporate reputation which has been shown to be a beneficial strategic asset. Using Structural Equation Modeling I explore economic, environmental and social signals as mediators on relationship between regionalization and firm reputation. Results indicate that these variables partially mediate a positive relationship between regionalization and firm reputation. While regionalization positively affects the reputation building signal of economic performance, it aids in reputation building by reducing environmental and social disclosure effects which interestingly impact reputation negatively. In conclusion, the dissertation submits opportunities for future research and contributes to research by demonstrating that regionalization affects performance, but the effect varies in accordance with the performance criterion and context. In some cases, regional diversification may produce competing or conflicting outcomes among the potential strategic objectives of the firm.

Modelagem de dados de entrada para simulação estocástica de lavra

Mine simulation depends on data that is both coherent and representative of the mining operation. This paper describes a methodology for modeling operational data which has been developed for mine simulation. The methodology has been applied to a case study of an open-pit mine, where the cycle times of the truck fleet have been modeled for mine simulation purposes. The results obtained have shown that once the operational data has been treated using the proposed methodology, the system variables have proven to be adherent to theoretical distributions. The research indicated the need jar tracking the origin of data inconsistencies through the development of a process to manage inconsistent data from the mining operation.

Incorporating demand-side aspects into regional policy: variations in the importance of private investment decision factors across regions

Most regional programs focus on the supply side of regions, emphasizing the attraction conditions offered, such as infrastructure, labor skills, tax incentives, etc. This study analyzes one aspect of the demand side, that is, how investment decisions of private firms are made by asking the question: ""Do corporations decide the same way on investments in different parts of the territory?"" The paper analyzes the investments of 373 large Brazilian firms during 1996-2004. Based on the investment decisions of these firms, the role of sales, cash-flow, external financing, and working capital is investigated through regression analysis. The regional influence is captured by explanatory variables representing regional and firm characteristics, and by interaction dummies between the region and the main investment determinants. The results indicate significant differences across regions in the importance of investment determinants. This information is important for regional development policy, because different mechanisms should be used in different regions to foster private investments.

Corruption and the size of government: causality tests for OECD and Latin American countries

The purpose of this article is to examine the causality between government size and corruption, and to verify if there is a different pattern of causality between developed Organization for Economic Co-operation and Development (OECD) countries (excluding Mexico) and developing countries (Latin American countries) during the period 1996 to 2003. Applying Granger and Huang`s (1997) methodology we find evidence that size of government Granger causes corruption in both samples. Since a larger government involvement in private markets today will be followed in future by a higher level of corruption a policy advice would be to enhance governance. The promotion of good governance helps to combat corruption given that it complements efforts to reduce corruption more directly, and it is strongly recommended by the International Monetary Fund, other multilateral institutions, and all worried with the negative impacts of corruption on economic activity.

Opportunistic and partisan election cycles in Brazil: new evidence at the municipal level

This article tests the hypothesis of opportunistic and partisan cycle models using a new large data set of Brazilian municipalities over the 1989-2005 period. The results show an increase in total and current expenditures and a decrease in municipal investments, local tax revenues, and budget surplus in election years. They also show that partisan ideology exerts a relative influence on the performance of the local public accounts. These results confirm that both opportunistic and partisan cycles have occurred in the management of the budgets of Brazilian municipalities after the end of the military government.

Fiscal policy and reelection in Brazilian municipalities

This paper uses a new panel of more than 2,000 Brazilian municipalities over 13 years to analyze the influence of public expenditures on the probability of mayors` reelection. We examine Brazilian municipal elections from 1988 to 2000 using a logit fixed-effects model. The results suggest that mayors who spend more during their terms of office increase the probability of their own reelection or of a successor of the same political party. In particular, higher capital spending over the years preceding elections and current expenditures in election years are beneficial to Brazilian incumbent mayors.

Demand elasticities for food products in Brazil: a two-stage budgeting system

The object of this article is to estimate demand elasticities for a basket of staple food important for providing the caloric needs of Brazilian households. These elasticities are useful in the measurement of the impact of structural reforms on poverty. A two-stage demand system was constructed, based on data from Household Expenditure Surveys (POF) produced by IBGE (The Brazilian Bureau of Statistics) in 1987/88 and 1995/96. We have used panel data to estimate the model, and have calculated income, own-price, and cross-price elasticities for eight groups of goods and services and, in the second stage, for 11 sub groups of staple food products. We estimated those elasticities for the whole sample of consumers and for two income groups.

Multicollinearity and financial constraint in investment decisions: a Bayesian generalized ridge regression

This paper addresses the investment decisions considering the presence of financial constraints of 373 large Brazilian firms from 1997 to 2004, using panel data. A Bayesian econometric model was used considering ridge regression for multicollinearity problems among the variables in the model. Prior distributions are assumed for the parameters, classifying the model into random or fixed effects. We used a Bayesian approach to estimate the parameters, considering normal and Student t distributions for the error and assumed that the initial values for the lagged dependent variable are not fixed, but generated by a random process. The recursive predictive density criterion was used for model comparisons. Twenty models were tested and the results indicated that multicollinearity does influence the value of the estimated parameters. Controlling for capital intensity, financial constraints are found to be more important for capital-intensive firms, probably due to their lower profitability indexes, higher fixed costs and higher degree of property diversification.

A stochastic frontier production function with flexible risk properties

This paper considers a stochastic frontier production function which has additive, heteroscedastic error structure. The model allows for negative or positive marginal production risks of inputs, as originally proposed by Just and Pope (1978). The technical efficiencies of individual firms in the sample are a function of the levels of the input variables in the stochastic frontier, in addition to the technical inefficiency effects. These are two features of the model which are not exhibited by the commonly used stochastic frontiers with multiplicative error structures, An empirical application is presented using cross-sectional data on Ethiopian peasant farmers. The null hypothesis of no technical inefficiencies of production among these farmers is accepted. Further, the flexible risk models do not fit the data on peasant farmers as well as the traditional stochastic frontier model with multiplicative error structure.

The effect of incentive reforms upon productivity: Evidence from the Vietnamese rice industry

In this study we use region-level panel data on rice production in Vietnam to investigate total factor productivity (TFP) growth in the period since reunification in 1975. Two significant reforms were introduced during this period, one in 1981 allowing farmers to keep part of their produce, and another in 1987 providing improved land tenure. We measure TFP growth using two modified forms of the standard Malmquist data envelopment analysis (DEA) method, which we have named the Three-year-window (TYW) and the Full Cumulative (FC) methods. We have developed these methods to deal with degrees of freedom limitations. Our empirical results indicate strong average TFP growth of between 3.3 and 3.5 per cent per annum, with the fastest growth observed in the period following the first reform. Our results support the assertion that incentive related issues have played a large role in the decline and subsequent resurgence of Vietnamese agriculture.