Internacionalização de empresas e o fechamento do capital : um estudo sobre a deslistagem no mercado brasileiro

This work contributes to the finance literature proposing to analyze the relationship between the degree of internationalization of Brazilian companies and the likelihood of delisting. Therefore, even though the internationalization as a differential, in the formulation of hypotheses and analysis of the relationship between the variables dealt with concepts and theories within the Corporate Governance, which is already established in theory when it comes to delisting. First, with a view to the theory of internalization, which gives competitive advantages to the company due the adoption internationalization strategy and in parallel to the positive effects that this strategy generates on firms performance, it was formulated an hypothesis that the degree of internationalization would be adversely related to the probability of delisting, mainly due to such benefits generated to the organization. In turn, as an alternative hypothesis of the research, it proposed a positive relationship between these variables, based on agency theory, according to which internationalization would contribute to delisting by increasing geographical separation between shareholders and managers and, consequently, agency conflicts and the difficulty of monitoring. For the achievement of objectives, as well as being included economic and financial variables and GC, it was proposed the analysis of periods of crisis, as the events of recent past of the Brazilian economy. Starting from a base model initially developed by Pour and Lasfer (2013), which later, the proxies of internationalization and crisis have been added also contemplating adjustments to the Brazilian context. The data collected include the period from 2006 to 2014 and information on active and inactive companies at Bovespa. As results, it was found negative significance between the degree of internationalization and the delisting decision, confirming the first hypothesis of the research and stating that the benefits generated by internationalization in the company generate it spreads and results that reduce the probability of delisting. By analyzing the results of control variables was still possible to observe that, even internationalization reducing the likelihood of delisting, by particular aspects of corporate governance in Brazil, such as the high ownership concentration, the benefits it generates contribute to delisting. Regarding the analysis in crisis, the consequences of the crisis of the US subprime in general market were more relevant that the occurrence of itself, unlike the Brazilian internal crisis of 2014, which was statistically significant for the analyzed event. For future researches it is suggested the expansion of database and individual treatment of the reasons adopted by a company when delisting decision.

Internal Capital, External Knowledge, and Random Draws: Three Drivers of Organizational Structure

This dissertation explores the complex interactions between organizational structure and the environment. In Chapter 1, I investigate the effect of financial development on the formation of European corporate groups. Since cross-country regressions are hard to interpret in a causal sense, we exploit exogenous industry measures to investigate a specific channel through which financial development may affect group affiliation: internal capital markets. Using a comprehensive firm-level dataset on European corporate groups in 15 countries, we find that countries

with less developed financial markets have a higher percentage of group affiliates in more capital intensive industries. This relationship is more pronounced for young and small firms and for affiliates of large and diversified groups. Our findings are consistent with the view that internal capital markets may, under some conditions, be more efficient than prevailing external markets, and that this may drive group affiliation even in developed economies. In Chapter 2, I bridge current streams of innovation research to explore the interplay between R&D, external knowledge, and organizational structure–three elements of a firm’s innovation strategy which we argue should logically be studied together. Using within-firm patent assignment patterns,

we develop a novel measure of structure for a large sample of American firms. We find that centralized firms invest more in research and patent more per R&D dollar than decentralized firms. Both types access technology via mergers and acquisitions, but their acquisitions differ in terms of frequency, size, and i\ntegration. Consistent with our framework, their sources of value creation differ: while centralized firms derive more value from internal R&D, decentralized firms rely more on external knowledge. We discuss how these findings should stimulate more integrative work on theories of innovation. In Chapter 3, I use novel data on 1,265 newly-public firms to show that innovative firms exposed to environments with lower M&A activity just after their initial public offering (IPO) adapt by engaging in fewer technological acquisitions and

more internal research. However, this adaptive response becomes inertial shortly after IPO and persists well into maturity. This study advances our understanding of how the environment shapes heterogeneity and capabilities through its impact on firm structure. I discuss how my results can help bridge inertial versus adaptive perspectives in the study of organizations, by

documenting an instance when the two interact.

What Does Board Capital Really Bring to the Table? Exploring the Effect of Directors’ Human and Social Capital on Effective Governance During International Expansion

What constitutes effective corporate governance? Which director characteristics render boards effective at positively influencing firm-level performance outcomes? This dissertation examines these questions by taking a multilevel, multidisciplinary approach to corporate governance. I explore the individual-, team-, and firm- level factors that enable directors to serve effectively as strategic resources during international expansion. I argue that directors’ international experience improves their ability to serve as effective strategic consultants and resource providers to firms during the complex internationalization process. However, unlike prior research, which tends to assume that directors with the potential to provide important resources uniformly do so, I acknowledge contextual factors (i.e. board cohesiveness, strategic relevance of directors’ experience) that affect their propensity to actually influence outcomes. I explore these issues in three essays: one review essay and two empirical essays. In the first empirical essay, I integrate resource dependence theory with insights from social-psychological research to explore the influence of board capital on firms’ cross-border M&A performance. Using a sample of cross-border M&As completed by S&P 500 firms from 2004-2009, I find evidence that directors’ depth of international experience is associated with superior pre-deal outcomes. This suggests that boards’ deep, market-specific knowledge is valuable during the target selection phase. I further find that directors’ breadth of international experience is associated with superior post-deal performance, suggesting that these directors’ global mindset helps firms in the post-M&A integration phase. I also find that these relationships are positively moderated by board cohesiveness, measured by boards’ internal social ties. In the second empirical essay, I explore the boundary conditions of international board capital by examining how the characteristics of firms’ internationalization strategy moderate the relationship between board capital and firm performance. Using a panel of 377 S&P 500 firms observed from 2004-2011, I find that boards’ depth of international experience and social capital are more important during early stages of internationalization, when firms tend to lack market knowledge and legitimacy in the host markets. On the other hand, I find that breadth of international experience has a stronger relationship with performance when firms’ have higher scope of internationalization, when information-processing demands are higher.

Introducing Corporate Reputation Continuity to Support Organizational Resilience Against Crises

As Corporate Reputation (CR) evolves into an important asset for organizations, crises and disasters stand as threats to the preservation of the reputation capital since they usually result to negative projections to their audiences and to problematic evaluations by their stakeholders. Viewing CR as the accumulated trust and positive evaluations of the stakeholders, this paper proposes a conceptual and normative framework for Reputation Continuity, which enhances the ability of organizations to preserve their reputation, instead of working for its recovery in the post-crisis period. In our approach, we propose a process of maintaining trusted links, instead of restoring them and establishing a reputation resilient organization, instead of one struggling to recover from reputation losses, after the crisis has emerged. Working closely with stakeholders during the crisis, injecting a sense of normality continuity through effective leadership and mitigating image problems are seen as critical concerns, alongside a set of managerial practices to be followed. Ultimately, it is argued that, the value-based and strategically integrated view of Business Continuity must be enhanced and supported by Reputation Continuity activities.

Determinants of Capital Structure of Swedish limited companies : Testing Trade-off Theory Against Pecking Order Theory

Research question- This thesis investigates the determinants of capital structure of the Swedish companies. In order to do so, the two dominant theories of the corporate structure are studied and their assumptions are tested. Thus, the study researches which one of the two theories is more appealing for the Swedish market. Methodology-The study follows a purely quantitative study, by conducting an econometric analysis. The data are collected from a secondary source and more particularly the "Retriever" database, which contains financial data of the Swedish companies. Findings- The findings indicate that the determinants of the corporate structure for the Swedish market do not differ from other studies which have been conducted in other countries. However, there is a difference when it comes to tax and non-tax shields. The results suggest that in most cases the Pecking Order Theory appears to be more representative for the Swedish market, since most of the coefficient appear to be in favour of it. Moreover, the significance of the effect of the industry for the financial leverage is confirmed.

Capital Intelectual e Desempenho Organizacional no Sector Farmacêutico Português

Segundo o paradigma económico vigente, os intangíveis são hoje os principais factores de produção que criam riqueza no meio empresarial, devendo ser entendidos pelos gestores como factores críticos de sucesso. O conjunto de intangíveis que criam valor organizacional e sustentam a vantagem competitiva constituem o capital intelectual. Se no meio académico, o capital intelectual é visto como um motor do desenvolvimento económico, no âmbito da sociedade do conhecimento, já no meio empresarial apesar do reconhecimento da sua importância estratégica, poucos conseguem defini-lo e identificá-lo, não sabendo mesmo como tirar proveito dele. Acresce ainda o facto de o principal entrave poder estar relacionado na dificuldade em medir e representar o valor gerado por este recurso intangível. A generalidade dos autores que se dedica ao estudo do capital intelectual sustenta a existência de uma relação entre este e o desempenho organizacional, numa óptica de criação e manutenção de vantagens competitivas sustentáveis. Este trabalho apresenta um estudo exploratório realizado no âmbito da indústria farmacêutica portuguesa, com o objectivo de investigar, por um lado, a presença dos três elementos do capital intelectual: capital humano, capital estrutural e capital relacional e, por outro, o seu inter-relacionamento dentro do contexto farmacêutico português. Por fim, pretende-se investigar até que ponto o capital intelectual contribui para o sucesso das organizações analisadas. / According to the prevailing economic paradigm, intangibles are now the main factors of production that are creating wealth in the business world and they should be seen by managers as crucial factors of success. The intangible assets that create organisational value and sustain a competitive edge constitute intellectual capital. In academia intellectual capital is viewed as a driving force for economic development, in the context of the knowledge society, but in the corporate world, although recognised for its strategic importance few people can define it and identify it, or even know how to exploit it. The chief obstacle may be related to the difficulty in measuring and representing the value engendered by this intangible resource. Most authors involved in studying intellectual capital believe that it is related to organisational performance in terms of creating and retaining sustainable competitive advantages. This work is an exploratory study of the Portuguese pharmaceutical industry and it set out, first, to inquire into the presence of the three elements of intellectual capital, human capital, structural capital and relational capital, and also to examine their interrelations within the Portuguese pharmaceutical context. A final objective was to ascertain the part played by intellectual capital in the success of the organizations studied.

Capital 2.0 capital formation and legal risk in a new global economic order from fiat to exit: including case studies of the proposed transatlantic trade and investment partnership between the United States and the European Union and the financing relation between the United States and the People’s Republic of China

Following the intrinsically linked balance sheets in his Capital Formation Life Cycle, Lukas M. Stahl explains with his Triple A Model of Accounting, Allocation and Accountability the stages of the Capital Formation process from FIAT to EXIT. Based on the theoretical foundations of legal risk laid by the International Bar Association with the help of Roger McCormick and legal scholars such as Joanna Benjamin, Matthew Whalley and Tobias Mahler, and founded on the basis of Wesley Hohfeld’s category theory of jural relations, Stahl develops his mutually exclusive Four Determinants of Legal Risk of Law, Lack of Right, Liability and Limitation. Those Four Determinants of Legal Risk allow us to apply, assess, and precisely describe the respective legal risk at all stages of the Capital Formation Life Cycle as demonstrated in case studies of nine industry verticals of the proposed and currently negotiated Transatlantic Trade and Investment Partnership between the United States of America and the European Union, TTIP, as well as in the case of the often cited financing relation between the United States and the People’s Republic of China. Having established the Four Determinants of Legal Risk and its application to the Capital Formation Life Cycle, Stahl then explores the theoretical foundations of capital formation, their historical basis in classical and neo-classical economics and its forefathers such as The Austrians around Eugen von Boehm-Bawerk, Ludwig von Mises and Friedrich von Hayek and most notably and controversial, Karl Marx, and their impact on today’s exponential expansion of capital formation. Starting off with the first pillar of his Triple A Model, Accounting, Stahl then moves on to explain the Three Factors of Capital Formation, Man, Machines and Money and shows how “value-added” is created with respect to the non-monetary capital factors of human resources and industrial production. Followed by a detailed analysis discussing the roles of the Three Actors of Monetary Capital Formation, Central Banks, Commercial Banks and Citizens Stahl readily dismisses a number of myths regarding the creation of money providing in-depth insight into the workings of monetary policy makers, their institutions and ultimate beneficiaries, the corporate and consumer citizens. In his second pillar, Allocation, Stahl continues his analysis of the balance sheets of the Capital Formation Life Cycle by discussing the role of The Five Key Accounts of Monetary Capital Formation, the Sovereign, Financial, Corporate, Private and International account of Monetary Capital Formation and the associated legal risks in the allocation of capital pursuant to his Four Determinants of Legal Risk. In his third pillar, Accountability, Stahl discusses the ever recurring Crisis-Reaction-Acceleration-Sequence-History, in short: CRASH, since the beginning of the millennium starting with the dot-com crash at the turn of the millennium, followed seven years later by the financial crisis of 2008 and the dislocations in the global economy we are facing another seven years later today in 2015 with several sordid debt restructurings under way and hundred thousands of refugees on the way caused by war and increasing inequality. Together with the regulatory reactions they have caused in the form of so-called landmark legislation such as the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, the JOBS Act of 2012 or the introduction of the Basel Accords, Basel II in 2004 and III in 2010, the European Financial Stability Facility of 2010, the European Stability Mechanism of 2012 and the European Banking Union of 2013, Stahl analyses the acceleration in size and scope of crises that appears to find often seemingly helpless bureaucratic responses, the inherent legal risks and the complete lack of accountability on part of those responsible. Stahl argues that the order of the day requires to address the root cause of the problems in the form of two fundamental design defects of our Global Economic Order, namely our monetary and judicial order. Inspired by a 1933 plan of nine University of Chicago economists abolishing the fractional reserve system, he proposes the introduction of Sovereign Money as a prerequisite to void misallocations by way of judicial order in the course of domestic and transnational insolvency proceedings including the restructuring of sovereign debt throughout the entire monetary system back to its origin without causing domino effects of banking collapses and failed financial institutions. In recognizing Austrian-American economist Schumpeter’s Concept of Creative Destruction, as a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one, Stahl responds to Schumpeter’s economic chemotherapy with his Concept of Equitable Default mimicking an immunotherapy that strengthens the corpus economicus own immune system by providing for the judicial authority to terminate precisely those misallocations that have proven malignant causing default perusing the century old common law concept of equity that allows for the equitable reformation, rescission or restitution of contract by way of judicial order. Following a review of the proposed mechanisms of transnational dispute resolution and current court systems with transnational jurisdiction, Stahl advocates as a first step in order to complete the Capital Formation Life Cycle from FIAT, the creation of money by way of credit, to EXIT, the termination of money by way of judicial order, the institution of a Transatlantic Trade and Investment Court constituted by a panel of judges from the U.S. Court of International Trade and the European Court of Justice by following the model of the EFTA Court of the European Free Trade Association. Since the first time his proposal has been made public in June of 2014 after being discussed in academic circles since 2011, his or similar proposals have found numerous public supporters. Most notably, the former Vice President of the European Parliament, David Martin, has tabled an amendment in June 2015 in the course of the negotiations on TTIP calling for an independent judicial body and the Member of the European Commission, Cecilia Malmström, has presented her proposal of an International Investment Court on September 16, 2015. Stahl concludes, that for the first time in the history of our generation it appears that there is a real opportunity for reform of our Global Economic Order by curing the two fundamental design defects of our monetary order and judicial order with the abolition of the fractional reserve system and the introduction of Sovereign Money and the institution of a democratically elected Transatlantic Trade and Investment Court that commensurate with its jurisdiction extending to cases concerning the Transatlantic Trade and Investment Partnership may complete the Capital Formation Life Cycle resolving cases of default with the transnational judicial authority for terminal resolution of misallocations in a New Global Economic Order without the ensuing dangers of systemic collapse from FIAT to EXIT.

REIT Capital Structure Choices: Preparation Matters

Sun, Titman, and Twite (2015) find that capital structure risks, namely high leverage and a high share of short-term debt, reduced the cumulative total return of US REITs in the 2007-2009 financial crisis. We find that mitigating capital structure risks ahead of the crisis by reducing leverage and extending debt maturity in 2006, was associated with a significantly higher cumulative total return 2007-2009, after controlling for the levels of those variables at the start of the financial crisis. We further identify two systematic cross-sectional differences between those REITs that reduced capital structure risks prior to the financial crisis and those that did not: the exposure to capital structure risks and the strength of corporate governance. On balance, our findings are consistent with the interpretation of risk-reducing adjustments to capital structure ahead of the crisis as a component of managerial skill and discipline with significant implications for firm value during the crisis.

Merging Paradigms: A framework for meeting the goals of sustainable development and corporate sustainability for cruise industry firms

Thesis (Master's)--University of Washington, 2016-06

Integrated Reporting in OMXS30 companies - An Analysis of Human Capital Disclosures

Background and Problem: Sustainability reporting is a growing interest in today’s organizations and it is essential to report on non-financial matters. Many of the existing frameworks have been criticized for being used only of symbolical reasons which is why the concept of integrated reporting and the <IR> framework have been developed. One of the cornerstones in the <IR> framework is human capital which is one of the most valuable assets in an organization. Traditionally, employee costs have only been treated as an expense and there have been limited disclosures in corporate reports. In the current business world it is instead seen as an investment in human resources. Since previous studies have shown an increase of human capital disclosures when corporate reports become integrated, integrated reporting might be the solution to this problem. Purpose: The purpose of this study is to examine if there are differences in human capital disclosures between integrated reports and separate annual and sustainability reports in companies listed at OMXS30. Delimitations: This study’s empirical examination is limited to include the companies listed at Stockholm OMX30. Only corporate reports issued for the year 2014 are treated. Methodology: For this study a self-constructed disclosure scoreboard with human capital- related items has been used to collect data from the companies’ corporate reports. Also additional information beyond the pre-determined items has been collected to extend the data collection. Empirical Results and Conclusion: The results show that human capital seems to be a subject that is relatively little reported about. The integrated reporting companies do not disclose more information compared to non-integrated reporting companies. However, the results show that integrated reporting companies seem to have a more future-oriented focus and that the disclosures are more dispersed throughout the reports. It can be concluded that company sector and size do not affect the amount or type of information. 

Intellectual Capital Disclosures: The effect of mandatory Integrated Reporting

Purpose – The purpose of this thesis is to investigate how mandatory obligation to follow the International <IR> Framework while producing the corporate reports influence the intellectual capital disclosures in the reports. Research design – The study uses a disclosure scoreboard to score a selected sample of annual reports depending on whether it disclose intellectual capital information or not. The sample consists of companies listed in South Africa were it is mandatory to follow the integrated reporting framework and companies listen in Sweden where it is not mandatory to produce an integrated report. Empirical results and conclusion – The results of this thesis indicates that the mandatory use of the International <IR> Framework have an impact on the amount of intellectual capital disclosures. Further it concludes that higher level of compliance with the framework further increases the intellectual capital disclosure. Contribution – This study has been an early step towards concluding whether the use of integrated reporting has any effect on the amount of intellectual capital information disclosed in companies’ annual report.

Capital structure of Finnish firms – Estimating the effects of firm characteristics on capital structure

One of the most disputable matters in the theory of finance has been the theory of capital structure. The seminal contributions of Modigliani and Miller (1958, 1963) gave rise to a multitude of studies and debates. Since the initial spark, the financial literature has offered two competing theories of financing decision: the trade-off theory and the pecking order theory. The trade-off theory suggests that firms have an optimal capital structure balancing the benefits and costs of debt. The pecking order theory approaches the firm capital structure from information asymmetry perspective and assumes a hierarchy of financing, with firms using first internal funds, followed by debt and as a last resort equity. This thesis analyses the trade-off and pecking order theories and their predictions on a panel data consisting 78 Finnish firms listed on the OMX Helsinki stock exchange. Estimations are performed for the period 2003–2012. The data is collected from Datastream system and consists of financial statement data. A number of capital structure characteristics are identified: firm size, profitability, firm growth opportunities, risk, asset tangibility and taxes, speed of adjustment and financial deficit. A regression analysis is used to examine the effects of the firm characteristics on capitals structure. The regression models were formed based on the relevant theories. The general capital structure model is estimated with fixed effects estimator. Additionally, dynamic models play an important role in several areas of corporate finance, but with the combination of fixed effects and lagged dependent variables the model estimation is more complicated. A dynamic partial adjustment model is estimated using Arellano and Bond (1991) first-differencing generalized method of moments, the ordinary least squares and fixed effects estimators. The results for Finnish listed firms show support for the predictions of profitability, firm size and non-debt tax shields. However, no conclusive support for the pecking-order theory is found. However, the effect of pecking order cannot be fully ignored and it is concluded that instead of being substitutes the trade-off and pecking order theory appear to complement each other. For the partial adjustment model the results show that Finnish listed firms adjust towards their target capital structure with a speed of 29% a year using book debt ratio.

Essays in corporate finance

China has been growing rapidly over the last decades. The private sector is the driving force of this growth. This thesis focuses on firm-level investment and cash holdings in China, and the chapters are structured around the following issues. 1. Why do private firms grow so fast when they are more financially constrained? In Chapter 3, we use a panel of over 600,000 firms of different ownership types from 1998 to 2007 to find the link between investment opportunities and financial constraints. The main finding indicates that private firms, which are more likely to be financially constrained, have high investment-investment opportunity sensitivity. Furthermore, this sensitivity is relatively lower for state-owned firms in China. This shows that constrained firms value investment opportunities more than unconstrained firms. To better measure investment opportunities, we attempt to improve the Q model by considering supply and demand sides simultaneously. When we capture q from the supply side and the demand side, we find that various types of firms respond differently towards different opportunity shocks. 2. In China, there are many firms whose cash flow is far greater than their fixed capital investment. Why is their investment still sensitive to cash flow? To explain this, in Chapter 4, we attempt to introduce a new channel to find how cash flow affects firm-level investment. We use a dynamic structural model and take uncertainty and ambiguity aversion into consideration. We find that uncertainty and ambiguity aversion will make investment less sensitive to investment opportunities. However, investment-cash flow sensitivity will increase when uncertainty is high. This suggests that investment cash flow sensitivities could still be high even when the firms are not financially constrained. 3. Why do firms in China hold so much cash? How can managers’ confidence affect corporate cash holdings? In Chapter 5, we analyse corporate cash holdings in China. Firms hold cash for precautionary reasons, to hedge frictions such as financing constraints and uncertainty. In addition, firms may act differently if they are confident or not. In order to determine how confidence shocks affect precautionary savings, we develop a dynamic model taking financing constraints, uncertainty, adjustment costs and confidence shocks into consideration. We find that without confidence shocks, firms will save money in bad times and invest in good times to maximise their value. However, if managers lose their confidence, they tend to save money in good times to use in bad times, to hedge risks and financing constraint problems. This can help explain why people find different results on the cash flow sensitivity of cash. Empirically, we use a panel of Chinese listed firms. The results show that firms in China save more money in good times, and the confidence shock channel can significantly affect firms’ cash holdings policy.

Interest rate (in)sensitivity of emerging market corporate debt : economic analysis based on 2002-2015 empirical evidence

Interest rate sensitivity assessment framework based on fixed income yield indexes is developed and applied to two types of emerging market corporate debt: investment grade and high yield exposures. Our research advances beyond the correlation analyses focused on co- movements in yields and/or spreads of risky and risk-free assets. We show that correlation- based analyses of interest rate sensitivity could appear rather inconclusive and, hence, we investigate the bottom line profit and loss of a hypothetical model portfolio of corporates. We consider historical data covering the period 2002 – 2015, which enable us to assess interest rate sensitivity of assets during the development, the apogee, and the aftermath of the global financial crisis. Based on empirical evidence, both for investment and speculative grades securities, we find that the emerging market corporates exhibit two different regimes of sensitivity to interest rate changes. We observe switching from a positive sensitivity under the normal market conditions to a negative one during distressed phases of business cycles. This research sheds light on how financial institutions may approach interest rate risk management, evidencing that even plain vanilla portfolios of emerging market corporates, which on average could appear rather insensitive to the interest rate risk in fact present a binary behavior of their interest rate sensitivities. Our findings allow banks and financial institutions for optimizing economic capital under Basel III regulatory capital rules.