Empirical study of exchange rates in Brazil, Canada and the Caribbean

This dissertation examines the monetary models of exchange rate determination for Brazil, Canada, and two countries in the Caribbean, namely, the Dominican Republic and Jamaica. With the exception of Canada, the others adopted the floating regime during the past ten years.^ The empirical validity of four seminal models in exchange rate economics were determined. Three of these models were entirely classical (Bilson and Frenkel) or Keynesian (Dornbusch) in nature. The fourth model (Real Interest Differential Model) was a mixture of the two schools of economic theory.^ There is no clear empirical evidence of the validity of the monetary models. However, the signs of the coefficients of the nominal interest differential variable were as predicted by the Keynesian hypothesis in the case of Canada and as predicted by the Chicago theorists in the remaining countries. Moreover, in case of Brazil, due to hyperinflation, the exchange rate is heavily influenced by domestic money supply.^ I also tested the purchasing power parity (PPP) for this same set of countries. For both the monetary as well as the PPP hypothesis, I tested for co-integration and applied ordinary least squares estimation procedure. The error correction model was also used for the PPP model, to determine convergence to equilibrium.^ The validity of PPP is also questionable for my set of countries. Endogeinity among the regressors as well as the lack of proper price indices are the contributing factors. More importantly, Central Bank intervention negate rapid adjustment of price and exchange rates to their equilibrium value. However, its forecasting capability for the period 1993-1994 is superior compared to the monetary models in two of the four cases.^ I conclude that in spite of the questionable validity of these models, the monetary models give better results in the case of the "smaller" economies like the Dominican Republic and Jamaica where monetary influences swamp the other determinants of exchange rate. ^

The effects of intellectual property rights on knowledge spillovers and innovation: An empirical investigation

FDI is believed to be a conduit of new technologies between countries. The first chapter of this dissertation studies the advantages of outward FDI for the home country of multinationals conducting research and development abroad. We use patent citations as a proxy for technology spillovers and we bring empirical evidence that supports the hypothesis that a U.S. subsidiary conducting research and development overseas facilitates the flow of knowledge between its host and home countries.^ The second chapter examines the impact of intellectual property rights (IPR) reforms on the technology flows between the U.S. and host countries of U.S. affiliates. We again use patent citations to examine whether the diffusion of new technology between the host countries and the U.S. is accelerated by the reforms. Our results suggest that the reforms favor innovative efforts of domestic firms in the reforming countries rather than U.S. affiliates efforts. In other words, reforms mediate the technology flows from the U.S. to the reforming countries.^ The third chapter deals with another form of IPR, open source (OS) licenses. These differ in the conditions under which licensors and OS contributors are allowed to modify and redistribute the source code. We measure OS project quality by the speed with which programming bugs are fixed and test whether the license chosen by project leaders influences bug resolution rates. In initial regressions, we find a strong correlation between the hazard of bug resolution and the use of highly restrictive licenses. However, license choices are likely to be endogenous. We instrument license choice using (i) the human language in which contributors operate and (ii) the license choice of the project leaders for a previous project. We then find weak evidence that restrictive licenses adversely affect project success.^

Generational Differences in Work Attitudes: Evidence from the Hospitality Industry

Our understanding of employee attitudes and their impact on business outcomes has been further complicated in recent years by the newest cohort of service workers. Known as Generation Y (Gen Y), they appear to approach employment in a manner different to that of their predecessors. A review of the academic literature reveals little empirical evidence to support an appropriate understanding of the impact of such difference. This paper provides an overview of a large-scale study into generational differences in employee attitudes and reports on the preliminary data analysis of a survey of over 900 hospitality employees. The most important initial finding from the data analysis is that, on the whole, Gen Y employees have lower scores on those constructs that an organization should be attempting to maximize. Non-Gen Y employees are more satisfied with their jobs, more engaged and more affectively committed to the organization they work for than their Gen Y counterparts, amongst a range of other important constructs. Conversely, Gen Y employees display higher scores onthe constructs that an organization would want to minimize in its staff. Gen Y employees are more likely to be planning to quit their jobs, are more likely to perform poorly if their co-workers are doing so, and are also more likely to switch jobs for no particular reason. The discussion covers implications for management as well as directions for future research.

Evidence of the heterogeneous market hypothesis using wavelet multi -resolution analysis

In finance literature many economic theories and models have been proposed to explain and estimate the relationship between risk and return. Assuming risk averseness and rational behavior on part of the investor, the models are developed which are supposed to help in forming efficient portfolios that either maximize (minimize) the expected rate of return (risk) for a given level of risk (rates of return). One of the most used models to form these efficient portfolios is the Sharpe's Capital Asset Pricing Model (CAPM). In the development of this model it is assumed that the investors have homogeneous expectations about the future probability distribution of the rates of return. That is, every investor assumes the same values of the parameters of the probability distribution. Likewise financial volatility homogeneity is commonly assumed, where volatility is taken as investment risk which is usually measured by the variance of the rates of return. Typically the square root of the variance is used to define financial volatility, furthermore it is also often assumed that the data generating process is made of independent and identically distributed random variables. This again implies that financial volatility is measured from homogeneous time series with stationary parameters. In this dissertation, we investigate the assumptions of homogeneity of market agents and provide evidence for the case of heterogeneity in market participants' information, objectives, and expectations about the parameters of the probability distribution of prices as given by the differences in the empirical distributions corresponding to different time scales, which in this study are associated with different classes of investors, as well as demonstrate that statistical properties of the underlying data generating processes including the volatility in the rates of return are quite heterogeneous. In other words, we provide empirical evidence against the traditional views about homogeneity using non-parametric wavelet analysis on trading data, The results show heterogeneity of financial volatility at different time scales, and time-scale is one of the most important aspects in which trading behavior differs. In fact we conclude that heterogeneity as posited by the Heterogeneous Markets Hypothesis is the norm and not the exception.

The determinants of R&D investment: A survey of the empirical research

This paper offers an extensive survey and a critical discussion of the empirical literature on the driving factors of R&D. These factors are subsumed under five broad types. The paper first summarises the key predictions from theory regarding each type's R&D effect. It then examines for which factors differences in the theoretical predictions can also be found in empirical studies, and for which factors the empirical evidence is more unanimous. As the focus is on the empirical literature, methodological issues are also highlighted. The major factor types identified in the literature are, individual firm or industry characteristics, particularly internal finance and sales; competition in product markets; R&D tax credits and subsidies; location and resource related factors, such as spillovers from university research within close geographic proximity, membership of a research joint venture and cooperation with research centres, and the human capital embodied in knowledge workers; and spillovers from foreign R&D. Although on balance there is a consensus regarding the R&D effects of most factors, there is also variation in results. Recent work suggests that accounting for non-linearities is one area of research that may explain and encompass contradictory findings.

Leaving and Coming Back to Canada : Evidence from Longitudinal Data (Working Paper 32)

The paper exploits the unique strengths of Statistics Canada's Longitudinal Administrative Database ("LAD"), constructed from individuals' tax records, to shed new light on the extent and nature of the emigration of Canadians to other countries and their patterns of return over the period 1982-1999. The empirical evidence begins with some simple graphs of the overall rates of leaving over time, and follows with the presentation of the estimation results of a model that essentially addresses the question: "who moves?" The paper then analyses the rates of return for those observed to leave the country - something for which there is virtually no existing evidence. Simple return rates are reported first, followed by the results of a hazard model of the probability of returning which takes into account individuals' characteristics and the number of years they have already been out of the country. Taken together, these results provide a new empirical basis for discussions of emigration in general, and the brain drain in particular. Of particular interest are the ebb and flow of emigration rates observed over the last two decades, including a perhaps surprising turndown in the most recent years after climbing through the earlier part of the 1990s; the data on the number who return after leaving, the associated patterns by income level, and the increases observed over the last decade.

The development of the accounting professional in a postcolonial context: evidence from Sierra Leone

Despite increasing interest in the development of the accountancy profession and constitutive professional bodies in ex-colonies, little is known about the development of professional accountants as individuals. Similarly, although the continuing influence of the legacies of colonialism and imperialism on the accounting professionalisation trajectory in ex-colonies has been recognised, little attempt has been made to theorise such continuing colonial intervention as a postcolonial condition of accommodation and resistance, with implications for the development of professional accountants. This thesis fills this vacuum by employing four aspects of the critical lens of postcolonial theory – local-global nexus, psycho-existential complex, postcolonial hybridity and diaspora - to gain an insight into the development of accounting professionals in ex-colonies with specific reference to Sierra Leone. Specifically, it examines the current model of accounting professionalisation adopted in Sierra Leone and implications for the development of professional accountants in the country; investigates the historical and ideological legacies of colonialism that shaped and continue to influence the professionalisation trajectory in Sierra Leone; explores the perceptions of Sierra Leonean chartered and aspiring accountants of their professional identity in terms of their professional development within Sierra Leone; and explores the lived experiences of Sierra Leonean chartered and aspiring accountants in the diaspora and the diaspora effect on accountancy in Sierra Leone. The empirical evidence presented here emanated from two sources: a web-based survey and semi-structured interviews with Sierra Leonean chartered and aspiring accountants both within and outside the country at the time of the study. The model for developing professional accountants in Sierra Leone comprises a partnership between the local professional body, ICASL, and the British-based global body, the ACCA. A postcolonial analysis of the empirical evidence reveals that an unintended consequence of this model is that the local is co-opted within the global while the global becomes increasingly localised. The analysis also shows that the presence of a perceived global body ‘inferiorises’ the local body to the point of undesirability among local chartered and aspiring accountants. Thus the partnership has to date done little by way of developing ICASL’s capacity to ensure the development of a localised profession and professionals. Instead, it produces, within the Sierra Leone accountancy space, professional hybrids that at once pose as global as well as local accountants. This has significant implications for the local profession because many of the hybrid professional accountants who could potentially drive the local profession forward end up in the diaspora, which leaves the local profession in a weaker state. Also, given the established link between a robust accountancy profession and sustainable economic development, such professional diasporisation could negatively impact on the country’s economic development. In sum, Sierra Leone has failed to establish an accounting professionalisation model that develops professional accountants (through contextualised professional education and training) that meets the specific accounting needs of its growing economy.

Trade Shocks and Local Labor Markets' Linkages: Theory and Evidence

In the past few years, there has been a concern among economists and policy makers that increased openness to international trade affects some regions in a country more than others. Recent research has found that local labor markets more exposed to import competition through their initial employment composition experience worse outcomes in several dimensions such as, employment, wages, and poverty. Although there is evidence that regions within a country exhibit variation in the intensity with which they trade with each other and with other countries, trade linkages have been ignored in empirical analyses of the regional effects of trade, which focus on differences in employment composition. In this dissertation, I investigate how local labor markets' trade linkages shape the response of wages to international trade shocks. In the second chapter, I lay out a standard multi-sector general equilibrium model of trade, where domestic regions trade with each other and with the rest of the world. Using this benchmark, I decompose a region's wage change resulting from a national import cost shock into a direct effect on prices, holding other endogenous variables constant, and a series of general equilibrium effects. I argue the direct effect provides a natural measure of exposure to import competition within the model since it summarizes the effect of the shock on a region's wage as a function of initial conditions given by its trade linkages. I call my proposed measure linkage exposure while I refer to the measures used in previous studies as employment exposure. My theoretical analysis also shows that the assumptions previous studies make on trade linkages are not consistent with the standard trade model. In the third chapter, I calibrate the model to the Brazilian economy in 1991--at the beginning of a period of trade liberalization--to perform a series of experiments. In each of them, I reduce the Brazilian import cost by 1 percent in a single sector and I calculate how much of the cross-regional variation in counterfactual wage changes is explained by exposure measures. Over this set of experiments, employment exposure explains, for the median sector, 2 percent of the variation in counterfactual wage changes while linkage exposure explains 44 percent. In addition, I propose an estimation strategy that incorporates trade linkages in the analysis of the effects of trade on observed wages. In the model, changes in wages are completely determined by changes in market access, an endogenous variable that summarizes the real demand faced by a region. I show that a linkage measure of exposure is a valid instrument for changes in market access within Brazil. By using observed wage changes in Brazil between 1991-2000, my estimates imply that a region at the 25th percentile of the change in domestic market access induced by trade liberalization, experiences a 0.6 log points larger wage decline (or smaller wage increase) than a region at the 75th percentile. The estimates from a regression of wages changes on exposure imply that a region at the 25th percentile of exposure experiences a 3 log points larger wage decline (or smaller wage increase) than a region at the 75th percentile. I conclude that estimates based on exposure overstate the negative impact of trade liberalization on wages in Brazil. In the fourth chapter, I extend the standard model to allow for two types of workers according to their education levels: skilled and unskilled. I show that there is substantial variation across Brazilian regions in the skill premium. I use the exogenous variation provided by tariff changes to estimate the impact of market access on the skill premium. I find that decreased domestic market access resulting from trade liberalization resulted in a higher skill premium. I propose a mechanism to explain this result: that the manufacturing sector is relatively more intensive in unskilled labor and I show empirical evidence that supports this hypothesis.

Empirical validation of CAPM

This paper pretends to show empirical evidence of the CAPM model of Sharpe-Lintner (1964) for Colombia from 2003 to 2010, whose validation is carried out using the method of Black, Jensen and Scholes (1972) but introducing certain methodological econometric type changes associated to the requirements imposed by the used sample -- Specifically, we found no empirical evidence to reject the CAPM for the Colombian economyin the period under analysis

The economics of credit markets: theory and evidence.

Doutoramento em Economia.

The impact of culture and corporate governance in dividend policy: evidence from emerging and developed countries

The present research aims to analyse the impact of corporate governance and cultural dimensions in dividend policy. The corporate governance and dividend policy have a close relationship, in that both are evidenced in literature to mitigate agency problems. Cultural factors are also related to agency problems. The existence of agency problems and their solutions differs across countries and it is related to the implementation of the mechanisms of governance. So, cultural factors may have influence on corporate governance and dividend policy. Our sample consists in 1 232 companies belonging to the main indices of 38 countries classified as emerging or developed. To measure the quality of firm level corporate governance, we use the ASSET4 Corporate Governance Performance Index, developed by Thomson Reuters, and as proxy of culture we use three cultural dimensions developed by Geert Hofstede, namely uncertainty avoidance, masculinity and indulgence. We obtained significant empirical evidence that firms with high quality of corporate governance pay higher dividends. With regard to cultural factors, we confirm that in countries with high levels of masculinity and uncertainty avoidance, the dividend payout ratio is lower. On the other hand, countries with high level of indulgence have higher dividend payout ratio. However, we verify that the impact of cultural effects is minimized when the firms have a high quality level of corporate governance. Additionally, we found that the impact of corporate governance and cultural factors in dividend policy differs when dealing with emerging or developed countries.

Music copyright in the digital age: creators, commerce and copyright - an empirical study of the UK music copyright industries

Copyright markets, it is said, are ‘winner takes all’ markets favouring the interests of corporate investors over the interests of primary creators. However, little is known about popular music creators’ ‘lived experience’ of copyright. This thesis interrogates key aspects of copyright transactions between creators and investors operating in the UK music industries using analysis of various copyright related documents and semi-structured interviews with creators and investors. The research found considerable variety in the types of ‘deal’ creators enter into and considerable divergence in the potential rewards. It was observed that new-entrant creators have little comprehension of the basic tenets of copyright, but with experience they become more ‘copyright aware’. Documentary and interview evidence reveals creators routinely assign copyright to third party investors for the full term of copyright in sound recordings: the justification for this is questionable. An almost inevitable consequence of this asymmetry of understanding of copyright and asymmetry of bargaining power is that creators become alienated from their copyright works. The empirical evidence presented here supports historic and contemporary calls for a statutory mechanism limiting the maximum copyright assignment period to ten-years.

Validade científica de conhecimento epidemiológico gerado com base no estudo Saúde Bucal Brasil 2003

Problematiza-se a afirmação de que não são válidas as estimativas sobre as condições de saúde bucal da população brasileira geradas pelo SB Brasil 2003. Criticam-se os elementos que pretendem sustentar esse ponto de vista com base apenas em conceitos estatísticos, sem prova empírica. Identificam-se reduções decorrentes da abordagem epistemocêntrica que recusa peremptoriamente outras formas de conhecimento e não reconhece o caráter multidisciplinar da epidemiologia. Reconstituem-se informações sobre a realização do levantamento e seu impacto na produção de conhecimento. Faz-se uma analogia entre ciência e arte, argumentando-se que, nas imagens obtidas por ambas, os saberes gerados a partir do objeto cognoscível assumem feições variadas e, portanto, o reconhecimento de sua validade requer amplo domínio do objeto e operações com adequados critérios de valor. Conclui-se pela cientificidade, validade e relevância da produção acadêmica desenvolvida a partir da base de dados do levantamento SB Brasil 2003.

Environmental management system and human resource practices: is there a link between them in four Brazilian companies?

The aim of this article is to analyze the theoretical model proposed by [Jabbour CJC, Santos FCA. Relationships between human resource dimensions and environmental management in companies: proposal of a model. Journal of Cleaner Production 2008;16(1):5 1-8.] based on the data collected in four Brazilian companies. This model investigates how the phases of the environmental management system can be linked to human resource practices in order to attain continuous improvement of a company`s environmental performance. Our aim is to contribute to a field, which has little empirical evidence. Although the interaction between the phases of the environmental management system and human resource practices is recommended by the specialized literature [Daily BE Huang S. Achieving sustainability through attention to human resource factors in environmental management. International Journal of Operations and Production Management 2001:21(12):1539-52.], the results indicate that most of the theoretical assumptions could not be confirmed in these Brazilian companies. (C) 2008 Elsevier Ltd. All rights reserved.

Understanding the strategies of late-movers in International Manufacturing

This paper analyzes the internationalization of new multinationals from emerging countries. It also focuses on Production`s role in firm internationalization, a subject seldom addressed because the discipline of International Manufacturing is still embryonic, while International Business tends to overlook production. The authors integrate International Business and International Manufacturing concepts and frameworks in order to analyze new multinationals from emerging countries, using the empirical evidence of a survey plus case studies of Brazilian multinationals for understanding late-movers` strategies and competences, with emphasis on production. (C) 2009 Elsevier B.V. All rights reserved.