Codeship: Financing growth: Case study and Teaching note

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Financing constraints and fixed-term employment contracts

This paper studies the interactions between financing constraints and theemployment decisions of firms when both fixed-term and permanent employmentcontracts are available. We first develop a dynamic model that shows theeffects of financing constraints and firing costs on employment decisions. Oncecalibrated, the model shows that financially constrained firms tend to use moreintensely fixed term workers, and to make them absorb a larger fraction of thetotal employment volatility than financially unconstrained firms do. We testand confirm the predictions of the model on a unique panel data of Italian manufacturingfirms with detailed information about the type of workers employedby the firms and about firm financing constraints.

Evaluating the federal role in financing health-related research

This paper considers the appropriate role for government in the support of scientific and technological progress in health care; the information the federal government needs to make well-informed decisions about its role; and the ways that federal policy toward research and development should respond to scientific advances, technology trends, and changes in the political and social environment. The principal justification for government support of research rests upon economic characteristics that lead private markets to provide inappropriate levels of research support or to supply inappropriate quantities of the products that result from research. The federal government has two basic tools for dealing with these problems: direct subsidies for research and strengthened property rights that can increase the revenues that companies receive for the products that result from research. In the coming years, the delivery system for health care will continue to undergo dramatic changes, new research opportunities will emerge at a rapid pace, and the pressure to limit discretionary federal spending will intensify. These forces make it increasingly important to improve the measurement of the costs and benefits of research and to recognize the tradeoffs among alternative policies for promoting innovation in health care.

Essays on Personal Bankruptcy Law and Small Business Financing

Thesis (Ph.D.)--University of Washington, 2016-06

Financing social ventures by crowdfunding: The inflluence of entrepreneurs’ personality traits

Purpose – This research aims to understand the role played by social entrepreneurs’ personality traits on the choice between the traditional donation model and social crowdfunding (CF) to finance social projects. Design/methodology/approach – Social CF is examined as an instrument to capture funds for social projects, and the particular case of the Portuguese Social Stock Exchange (PSSE) is presented. The approach is quantitative in nature and the data were collected through a questionnaire that was emailed to non-governmental organizations in Portugal and founders of the projects listed on PSSE. Logistic regression was employed to predict the probability that a social entrepreneur would use PSSE rather than traditional financing. The predictor variables were based on the big five personality traits. Findings – Our investigation reveals that the agreeableness and neuroticism factors were not even considered in the results of the factorial analysis, which indicates the minor importance of these personality traits in the funding decisions of the Portuguese social entrepreneurs. The same applies to the factors of openness to new experiences and extraversion, which, although considered in the logistic analysis, showed no statistical significance. Finally, the conscientiousness personality trait seems to be the only factor that might explain the use of the PSSE platform.Originality/value – Studies on the profile of the social entrepreneurs that use CF for financing social projects are relatively rare, specifically in the context of Social Stock Exchange platforms. Additionally, there is a need to carry out more empirical evidence about the effect of social entrepreneurs’ personality traits on the decision to finance social projects through social CF platforms vis-a-vis the traditional donation model.

Empirical studies on share issuance and repurchase decisions

Financial constraints influence corporate policies of firms, including both investment decisions and external financing policies. The relevance of this phenomenon has become more pronounced during and after the recent financial crisis in 2007/2008. In addition to raising costs of external financing, the effects of financial crisis limited the availability of external financing which had implications for employment, investment, sale of assets, and tech spending. This thesis provides a comprehensive analysis of the effects of financial constraints on share issuance and repurchases decisions. Financial constraints comprise both internal constraints reflecting the demand for external financing and external financial constraints that relate to the supply of external financing. The study also examines both operating performance and stock market reactions associated with equity issuance methods. The first empirical chapter explores the simultaneous effects of financial constraints and market timing on share issuance decisions. Internal financing constraints limit firms’ ability to issue overvalued equity. On the other hand, financial crisis and low market liquidity (external financial constraints) restrict availability of equity financing and consequently increase the costs of external financing. Therefore, the study explores the extent to which internal and external financing constraints limit market timing of equity issues. This study finds that financial constraints play a significant role in whether firms time their equity issues when the shares are overvalued. The conclusion is that financially constrained firms issue overvalued equity when the external equity market or the general economic conditions are favourable. During recessionary periods, costs of external finance increase such that financially constrained firms are less likely to issue overvalued equity. Only unconstrained firms are more likely to issue overvalued equity even during crisis. Similarly, small firms that need cash flows to finance growth projects are less likely to access external equity financing during period of significant economic recessions. Moreover, constrained firms have low average stock returns compared to unconstrained firms, especially when they issue overvalued equity. The second chapter examines the operating performance and stock returns associated with equity issuance methods. Firms in the UK can issue equity through rights issues, open offers, and private placement. This study argues that alternative equity issuance methods are associated with a different level of operating performance and long-term stock returns. Firms using private placement are associated with poor operating performance. However, rights issues are found empirically to be associated with higher operating performance and less negative long-term stock returns after issuance in comparison to counterpart firms that issue private placements and open offers. Thus, rights issuing firms perform better than open offers and private placement because the favourable operating performance at the time of issuance generates subsequent positive long-run stock price response. Right issuing firms are of better quality and outperform firms that adopt open offers and private placement. In the third empirical chapter, the study explores the levered share repurchase of internally financially unconstrained firms. Unconstrained firms are expected to repurchase their shares using internal funds rather than through external borrowings. However, evidence shows that levered share repurchases are common among unconstrained firms. These firms display this repurchase behaviour when they have bond ratings or investment grade ratings that allow them to obtain cheap external debt financing. It is found that internally financially unconstrained firms borrow to finance their share repurchase when they invest more. Levered repurchase firms are associated with less positive abnormal returns than unlevered repurchase firms. For the levered repurchase sample, high investing firms are associated with more positive long-run abnormal stock returns than low investing firms. It appears the market underreact to the levered repurchase in the short-run regardless of the level of investments. These findings indicate that market reactions reflect both undervaluation and signaling hypotheses of positive information associated with share repurchase. As the firms undertake capital investments, they generate future cash flows, limit the effects of leverage on financial distress and ultimately reduce the risk of the equity capital.

A vaccination game based on public health actions and personal decisions

Susceptible-infective-removed (SIR) models are commonly used for representing the spread of contagious diseases. A SIR model can be described in terms of a probabilistic cellular automaton (PCA), where each individual (corresponding to a cell of the PCA lattice) is connected to others by a random network favoring local contacts. Here, this framework is employed for investigating the consequences of applying vaccine against the propagation of a contagious infection, by considering vaccination as a game, in the sense of game theory. In this game, the players are the government and the susceptible newborns. In order to maximize their own payoffs, the government attempts to reduce the costs for combating the epidemic, and the newborns may be vaccinated only when infective individuals are found in their neighborhoods and/or the government promotes an immunization program. As a consequence of these strategies supported by cost-benefit analysis and perceived risk, numerical simulations show that the disease is not fully eliminated and the government implements quasi-periodic vaccination campaigns. (C) 2011 Elsevier B.V. All rights reserved.

Lepidopteran larva consumption of soybean foliage: basis for developing multiple-species economic thresholds for pest management decisions

BACKGROUND: Defoliation by Anticarsia gemmatalis (Hubner), Pseudoplusia includens (Walker), Spodoptera eridania (Cramer), S. cosmioides (Walker) and S. frugiperda (JE Smith) (Lepidoptera: Noctuidae) was evaluated in four soybean genotypes. A multiple-species economic threshold (ET), based upon the species` feeding capacity, is proposed with the aim of improving growers` management decisions on when to initiate control measures for the species complex. RESULTS: Consumption by A. gemmatalis, S. cosmioides or S. eridania on different genotypes was similar. The highest consumption of P. includens was 92.7 cm(2) on Codetec 219RR; that of S. frugiperda was 118 cm(2) on Codetec 219RR and 115.1 cm(2) on MSoy 8787RR. The insect injury equivalent for S. cosmoides, calculated on the basis of insect consumption, was double the standard consumption by A. gemmatalis, and statistically different from the other species tested, which were similar to each other. CONCLUSIONS: As S. cosmioides always defoliated nearly twice the leaf area of the other species, the injury equivalent would be 2 for this lepidopteran species and 1 for the other species. The recommended multiple-species ET to trigger the beginning of insect control would then be 20 insect equivalents per linear metre. (C) 2010 Society of Chemical Industry

Using household survey data to inform policy decisions regarding the delivery of evidence-based parenting interventions.

Background: This study used household survey data on the prevalence of child, parent and family variables to establish potential targets for a population-level intervention to strengthen parenting skills in the community. The goals of the intervention include decreasing child conduct problems, increasing parental self-efficacy, use of positive parenting strategies, decreasing coercive parenting and increasing help-seeking, social support and participation in positive parenting programmes. Methods: A total of 4010 parents with a child under the age of 12 years completed a statewide telephone survey on parenting. Results: One in three parents reported that their child had a behavioural or emotional problem in the previous 6 months. Furthermore, 9% of children aged 2–12 years meet criteria for oppositional defiant disorder. Parents who reported their child's behaviour to be difficult were more likely to perceive parenting as a negative experience (i.e. demanding, stressful and depressing). Parents with greatest difficulties were mothers without partners and who had low levels of confidence in their parenting roles. About 20% of parents reported being stressed and 5% reported being depressed in the 2 weeks prior to the survey. Parents with personal adjustment problems had lower levels of parenting confidence and their child was more difficult to manage. Only one in four parents had participated in a parent education programme. Conclusions: Implications for the setting of population-level goals and targets for strengthening parenting skills are discussed.

Auditory lexical decisions in children with specific language impairment

This study examined spoken-word recognition in children with specific language impairment (SLI) and normally developing children matched separately for age and receptive language ability. Accuracy and reaction times on an auditory lexical decision task were compared. Children with SLI were less accurate than both control groups. Two subgroups of children with SLI, distinguished by performance accuracy only, were identified. One group performed within normal limits, while a second group was significantly less accurate. Children with SLI were not slower than the age-matched controls or language-matched controls. Further, the time taken to detect an auditory signal, make a decision, or initiate a verbal response did not account for the differences between the groups. The findings are interpreted as evidence for language-appropriate processing skills acting upon imprecise or underspecified stored representations.

Production efficiency and financing of public health: an analysis of small municipalities in the state of Sao Paulo - Brazil

This paper measured the variations in performance of small municipalities in the State of Sao Paulo, Brazil, regarding the technical efficiency in the use of public funds in public primary health care actions concerning the funding profile, in a scenario of fiscal federalism. Technical efficiency is one of the parameters of evaluation of public sector performance and was measured by means of Data Envelopment Analysis (DEA). The correlation analysis of DEA score was used to verify possible associations between technical efficiency and the funding profile of expenses with health care. The results showed that 6.41% of the municipalities were considered efficient. They also showed that the level of municipality dependence to inter-governmental general purpose grants and the national health funding specific purpose grants have negative correlation with efficiency scores.

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.

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.