Financial distress, financial constraint and investment decision: Evidence from Brazil

This paper analyses the presence of financial constraint in the investment decisions of 367 Brazilian firms from 1997 to 2004, using a Bayesian econometric model with group-varying parameters. The motivation for this paper is the use of clustering techniques to group firms in a totally endogenous form. In order to classify the firms we used a hybrid clustering method, that is, hierarchical and non-hierarchical clustering techniques jointly. To estimate the parameters a Bayesian approach was considered. Prior distributions were assumed for the parameters, classifying the model in random or fixed effects. Ordinate predictive density criterion was used to select the model providing a better prediction. We tested thirty models and the better prediction considers the presence of 2 groups in the sample, assuming the fixed effect model with a Student t distribution with 20 degrees of freedom for the error. The results indicate robustness in the identification of financial constraint when the firms are classified by the clustering techniques. (C) 2010 Elsevier B.V. All rights reserved.

FOREIGN INVESTMENT AND THE BRAZILIAN REAL ESTATE MARKET

This article discusses the main aspects of the Brazilian real estate market in order to illustrate if it would be attractive for a typical American real estate investor to buy office-building portfolios in Brazil. The article emphasizes: [i] - the regulatory frontiers, comparing investment securitization, using a typical American REIT structure, with the Brazilian solution, using the Fundo de Investimento Imobiliario - FII; [ii] - the investment quality attributes in the Brazilian market, using an office building prototype, and [iii] - the comparison of [risk vs. yield] generated by an investment in the Brazilian market, using a FII, benchmarked against an existing REIT (OFFICE SUB-SECTOR) in the USA market. We conclude that investing dollars exchanged for Reais [the Brazilian currency] in a FII with a triple A office-building portfolio in the Sao Paulo marketplace will yield an annual income and a premium return above an American REIT investment. The highly aggressive scenario, along with the strong persistent exchange rate detachment to the IGP-M variations, plus instabilities affecting the generation of income, and even if we adopt a 300-point margin for the Brazil-Risk level, demonstrates that an investment opportunity in the Brazilian market, in the segment we have analyzed, outperforms an equivalent investment in the American market.

Performance of a solar energy powered falling film evaporator with film promoter

A solar energy powered failing film evaporator with film promoter was developed for concentrating diluted solutions (industrial effluents). The procedure proposed here does not emit CO(2), making it a viable alternative to the method of concentrating solutions that uses vapor as a heat source and releases CO(2) from burning fuel oil in a furnace, in direct opposition to the carbon reduction agreement established by the Kyoto protocol. This novel device consists of the following components: a flat plate solar collector with adjustable inclination, a film promoter (adhering to the collector), a liquid distributor, a concentrate collector. and accessories. The evaporation rate of the device was found to be affected both by the inclination of the collector and by the feed flow. The meteorological variables cannot be controlled, but were monitored constantly to ascertain the behavior of the equipment in response to the variations occurring throughout the day. Higher efficiencies were attained when the inclination of the collector was adjusted monthly, showing up to 36.4% higher values than when the collector remained in a fixed position. (c) 2008 Elsevier Ltd. All rights reserved.

USE OF SOLAR ENERGY IN THE TREATMENT OF WATER CONTAMINATED WITH PHENOL BY PHOTOCHEMICAL PROCESSES

The solar driven photo-Fenton process for treating water containing phenol as a contaminant has been evaluated by means of pilot-scale experiments with a parabolic trough solar reactor (PTR). The effects of Fe(II) (0.04-1.0 mmol L(-1)), H(2)O(2) (7-270 mmol L(-1)), initial phenol concentration (100 and 500 mg C L(-1)), solar radiation, and operation mode (batch and fed-batch) on the process efficiency were investigated. More than 90% of the dissolved organic carbon (DOC) was removed within 3 hours of irradiation or less, a performance equivalent to that of artificially-irradiated reactors, indicating that solar light can be used either as an effective complementary or as an alternative source of photons for the photo-Fenton degradation process. A non-linear multivariable model based on a neural network was fit to the experimental results of batch-mode experiments in order to evaluate the relative importance of the process variables considered on the DOC removal over the reaction time. This included solar radiation, which is not a controlled variable. The observed behavior of the system in batch-mode was compared with fed-batch experiments carried out under similar conditions. The main contribution of the study consists of the results from experiments under different conditions and the discussion of the system behavior. Both constitute important information for the design and scale-up of solar radiation-based photodegradation processes.

Open-circuit voltages: Theoretical and experimental optimizations of rear passivated silicon solar cells using Fz and Cz wafers

The theoretical and experimental open-circuit voltage optimizations of a simple fabrication process of silicon solar cells n(+)p with rear passivation are presented. The theoretical results were obtained by using an in-house developed program, including the light trapping effect and metal-grid optimization. On the other hand, the experimental steps were monitored by the photoconductive decay technique. The starting materials presented thickness of about 300 pm and resistivities: FZ (0.5 Omega cm), Cz-type 1 (2.5 Omega cm) and Cz-type 2 (3.3 Omega cm). The Gaussian profile emitters were optimized with sheet resistance between 55 Omega/sq and 100 Omega/sq, and approximately 2.0 mu m thickness in accordance to the theoretical results. Excellent implied open-circuit voltages of 670.8 mV, 652.5 mV and 662.6 mV, for FZ, Cz-type 1 and Cz-type 2 silicon wafers, respectively, could be associated to the measured lifetimes that represents solar cell efficiency up to 20% if a low cost anti-reflection coating system, composed by random pyramids and SiO(2) layer, is considered even for typical Cz silicon. (C) 2009 Elsevier Ltd. All rights reserved.

Tax Cost of Investment Projects: the case of ICMS credits

This article discusses the impact on the profitability of firms under Complementary Law 102/2000 (which abrogated the Law 89/96 - Kandir Law) allowing the appropriation of ICMS credits, due to investment in fixed assets goods, at a ratio of 1/48 per month. The paper seeks to demonstrate how this new system - which resulted in the transformation of the ICMS as a value added tax (VAT) consumption-type to an income-type - leads to a loss of approximately 30% of the value of credits to be recovered and the effect it generates on the cost of investment and the profits for small, medium and large firms. From the methodological point of view, it is a descriptive and quantitative research, which proceeded in three stages. Initially, we have obtained estimated value of net sales and volume of investments, based on report Painel de Competitividade prepared by the Federacao das Indtustrias do Estado de Sao Paulo (Fiesp/Serasa). Based on this information, it was possible to obtain estimates of the factors of generation of debits and credits for ICMS, using the model Credit Control of Fixed Assets (CIAP). Finally, we have calculated three indicators: (i) present value of debt recovery/value of credits, (ii) present value of debt recovery / investment value, (iii) present value of debt recovery / sales profitability. We have conclude that the system introduced by Complementary Law 102/2000 implicates great opportunity cost for firms and that legislation should be reviewed from this perspective, aiming to ensure lower costs associated with investment projects.

Implication of the visual system in the regulation of activity cycles in the absence of solar light: 2-[I-125]iodomelatonin binding sites and melatonin receptor gene expression in the brains of demersal deep-sea gadiform fish

Relative eye size, gross brain morphology and central localization of 2-[I-125]iodomelatonin binding sites and melatonin receptor gene expression were compared in six gadiform fish living at different depths in the north-east Atlantic Ocean: Phycis blennoides (capture depth range 265-1260 m), Nezumia aequalis (445-1512 m), Coryphaenoides rupestris (706-1932 m), Trachyrincus murrayi (1010-1884 m), Coryphaenoides guentheri (1030 m) and Coryphaenoides (Nematonurus) armatus (2172-4787 m). Amongst these, the eye size range was 0.15-0.35 of head length with a value of 0.19 for C.(N.) armatus, the deepest species. Brain morphology reflected behavioural differences with well-developed olfactory regions in P.blennoides, T.murrayi and C. (N.) armatus and evidence of olfactory deficit in N. aequalis, C. rupestris and C. guentheri. All species had a clearly defined optic tectum with 2-[I-125] iodomelatonin binding and melatonin receptor gene expression localized to specific brain regions in a similar pattern to that found in shallow-water fish. Melatonin receptors were found throughout the visual structures of the brains of all species. Despite living beyond the depth of penetration of solar light these fish have retained central features associated with the coupling of cycles of growth, behaviour and reproduction to the diel light-dark cycle. How this functions in the deep sea remains enigmatic.

The polar ionosphere at Zhongshan Station on May 11, 1999, the day the solar wind almost disappeared

The solar wind almost disappeared on May 11,1999: the solar wind plasma density and' dynamic pressure were less than 1 cm(-3) and 0.1 nPa respectively, while the interplanetary magnetic field was northward. The polar ionospheric data observed by the multi-instruments at Zhongshan Station in Antarctica on such special event day was compared with those of the control day (May 14). It was shown that geomagnetic activity was very quiet on May 11 at Zhongshan. The magnetic pulsation, which usually occurred at about magnetic noon, did not appear. The ionosphere was steady and stratified, and the F-2 layer spread very little. The critical frequency of dayside F-2 layer, f(0)F(2), was larger than that of control day, and the peak of f(0)F(2) appeared 2 hours earlier. The ionospheric drift velocity was less than usual. There were intensive auroral E-s appearing at magnetic noon. All this indicates that the polar ionosphere was extremely quiet and geomagnetic field was much more dipolar on May 11. There were some signatures of auroral substorm before midnight, such as the negative deviation of the geomagnetic H component, accompanied with auroral E-s and weak Pc3 pulsation.

The secondary vascular system of Actinopterygii: interspecific variation in origins and investment

Vascular casts of 3 species of Chondrichthyes, 1 of Dipnoi, 1 of Chondrostei and 14 species of the Teleostei were examined by light and scanning electron microscopy in order to give a qualitative and quantitative analysis of interarterial anastomoses (iaas) that indicate the presence (or absence) of a secondary vascular system (SVS). Anastomoses were found to originate from a variety of different primary blood vessels, many of which have not been previously identified as giving rise to secondary vessels. Segmental arteries derived from the dorsal aorta and supplying body musculature were major sites of origin of the SVS, although there was considerable variation in where, in the hierarchy of arterial branching, the anastomoses occurred. The degree of investment in a SVS was species specific, with more active species having a higher degree of secondary vascularisation. This difference was quantified using an absolute count of iaas between Anguilla reinhardtii and Trachinotus baillonii. A range of general features of the SVS is also described. No evidence of iaas was found on the coeliac, mesenteric or renal circulation in any species. Evidence of iaas was lacking in the dipnoan and chondrichthyan species examined, suggesting that a SVS is restricted to Actinopterygii. The presence and distribution of a SVS does not appear to be exclusively linked to phylogenetic position, but rather to the physiological adaptation of the species.

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.

Heterogeneity, saving-investment dynamics and capital mobility in Latin America

The purpose of this paper is to analyze the dynamics of national saving-investment relationship in order to determine the degree of capital mobility in 12 Latin American countries. The analytically relevant correlation is the short-term one, defined as that between changes in saving and investment. Of special interest is the speed at which variables return to the long run equilibrium relationship, which is interpreted as being negatively related to the degree of capital mobility. The long run correlation, in turn, captures the coefficient implied by the solvency constraint. We find that heterogeneity and cross-section dependence completely change the estimation of the long run coefficient. Besides we obtain a more precise short run coefficient estimate compared to the existent estimates in the literature. There is evidence of an intermediate degree of capital mobility, and the coefficients are extremely stable over time.

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.