Taylor rule in Brazil

In this paper, we use the Taylor Rule to characterize empirically the Brazilian monetary policy before and after its major and succesful stabilization plan, Real Plan, launched in 1994. Specifically, we show how the inflation coefficient has changed after the stabilization plan was carried out. This is a natural experiment to test theories surrounding the Taylor Rule in which monetary instability is characterized by an inflation coefficient less than one, whereas monetary stability will have a greater than one coefficient (seeWoodford’s (2003)). Very suprisingly the paper shows that the inflation coefficient has remained less than one even after the stabilization. Our results are quite robust with respect to different samples, lags of variables, proxies for GDP, proxies for potential GDP and even with respect to econometric methods (see Bueno (2005a, 2005b)). The implications are very important both theoretically and empirically. First, it shows some gap in theory that deserves further investigation. Second, it suggests that the inflation targeting regime has been uneffective in Brazil confirming a feeling largerly spread among Brazilians.

Taylor rule in Brazil

In this paper, we use the Taylor Rule to characterize empirically the Brazilian monetary policy before and after its major and succesful stabilization plan, Real Plan, launched in 1994. Specifically, we show how the inflation coefficient has changed after the stabilization plan was carried out. This is a natural experiment to test theories surrounding the Taylor Rule in which monetary instability is characterized by an inflation coefficient less than one, whereas monetary stability will have a greater than one coefficient (seeWoodford’s (2003)). Very suprisingly the paper shows that the inflation coefficient has remained less than one even after the stabilization. Our results are quite robust with respect to different samples, lags of variables, proxies for GDP, proxies for potential GDP and even with respect to econometric methods (see Bueno (2005a, 2005b)). The implications are very important both theoretically and empirically. First, it shows some gap in theory that deserves further investigation. Second, it suggests that the inflation targeting regime has been uneffective in Brazil confirming a feeling largerly spread among Brazilians.

Growth process in business and social entrepreneurship: the case of Brazil

The purpose of the dissertation is to investigate in depth the difference between the challenges social and business entrepreneurs face in the growth phase of their business in the particular environment of Brazil. This objective has been achieved through a two-steps methodology. The first step is a set of in-depth interviews carried out with industry experts such as professors, venture capitalists, consultants, fund managers or people involved in the support of growing startups (i.e. accelerators). These interviews allowed, first, to build a general perspective on the environment entrepreneurs operate into and to identify a list of challenges entrepreneurs face in the growth process of their business. This list was completed with the additional challenges identified in the previous literature. The second step of the methodology was to test the relevance of these challenges in the mind and experience of social and traditional entrepreneurs. A questionnaire was then submitted to 145 social and 286 traditional entrepreneurs. The results were statistically analyzed to test the relative relevance of these challenges for one group of entrepreneurs with respect to the other. The outcome of the analysis was significant. The most relevant challenges identified were, for both groups, taxation, bureaucracy, finding the right employees, creating effective teams, measuring firm performance and social value creation and obtaining funds. On the other side motivation, innovation, competition and lack of market space for growth represented the least relevant issues in the minds of entrepreneurs. This rank however did not differ significantly from social to traditional entrepreneurs. This testifies that in Brazil social and traditional entrepreneurs face the same set of challenges despite the widespread belief of the opposite.

Toward a venture capital-backed entrepreneurship model in Brazil

It is well documented venture capital‟s positive impact on creation and development of highly successful innovative companies worldwide. Venture capital not only provides funding to startups and SMEs (small and medium enterprises) that usually have financing gap, especially in emerging markets, but also brings a whole package of valuable resources that reduces companies‟ mortality rates. Using quantitative data obtained from an empirical survey as background, this paper discusses the role of venture capital in the success of innovative startups and SMEs, and it examines if, and to what extent, venture capitalists are supporting the entrepreneurial activity in Brazil. I focused on the portfolio companies analyzes and confirmed the hypothesis that the venture capital industry has been supporting entrepreneurship in Brazil. Second, I identified an important evidence of a venture capital‟s positive impact on economic activity, especially the capital market. Third, it became clear that venture capital-back entrepreneurship is highly concentrated in the Southeast region. And fourth, I identified that private equity expansion is also playing a key role on that dynamics. As consequence, I conclude that the venture capital (and private equity) industry has been very important to build an enormously dynamic and strong local entrepreneurial economy. Its committed capital grew 50% per year between 2005 and 2008 to achieve US$27 billion, which invested US$ 11 billion, which employs 1,400 professionals (75% with post-graduate degrees) and maintains 482 portfolio companies, mostly SMEs. In addition, venture capital-backed companies represented one third of the IPOs that occurred in Brazil between 2004 and 2008 (approximately US$15 billion).

Fostering innovation and entrepreneurship in Brazil through private equity and venture capital public policies

It is well documented the positive impact of the Private Equity and Venture Capital (PE/VC) industry on the creation and development of highly successful innovative companies in a few countries, mainly in the United States. PE/VC firms provide not only capital to startups and small and medium enterprises (SMEs) that usually have financing gap, especially in emerging markets, but also strategic resources that enable these enterprises to commercialize innovation. As consequence, government incentive and nurture of local PE/VC industries would be expected in emerging economies due to innovation‟s importance to economic growth. This paper aims to identify if the Brazilian government has supported local PE/VC industry throughout the years in order to foster favorable conditions to creating and developing successful innovative businesses. It also analyzes Brazil‟s main public policies towards PE/VC and if they encompass all the three stages of its cycle – fundraising, investing and exiting. I conducted an empirical research which collected primary data from a sample of 127 PE/VC firms (90% of the population) operating in Brazil as of June, 2008. All firms answered a webbased questionnaire that collected quantitative data regarding their investment vehicles, portfolio companies, investments and exits. I compared the data obtained from the survey with the main local governmental PE/VC support programs. First, I confirmed the hypothesis that the Brazilian government has been using the PE/VC industry as a public policy towards entrepreneurship and innovation. Second, I identified that although PE/VC public policies in Brazil are mostly concentrated in fundraising phase, they have been able to positively impact the whole cycle. Third, it became clear that the Brazilian government became more concerned about Seed and Venture Capital (VC) Early stages due to their importance to the entire PE/VC value chain. As consequence, I conclude that those public policies have been very important to build a dynamic and strong local PE/VC industry, whose committed capital grew 50% per year between 2005 and 2008 to achieve US$27 billion, which invested US$ 11 billion, which employs 1,400 professionals (75% with postgraduate degrees) and maintains 482 portfolio companies, mostly SMEs. In addition, PE/VCbacked companies represented one third of the Initial Public Offerings (IPOs) that occurred in Brazil between 2004 and 2008 (approximately US$15 billion).

High-growth SMEs and the availability of private equity and venture capital in Brazil

This chapter discusses private equity and venture capital (PE/VC) in Brazil. Firstly, it is shown that PE/VC has a strong impact in the Brazilian capital markets, with PE/VC-backed companies representing close to half the amount raised by initial public offerings (IPOs) in the stock exchanges. By examining two of these deals, which involved small and mediumsized enterprises (SMEs), it is argued that PE/VC managers have acted as catalysts of the impressive growth rates experienced before these companies entered the stock markets. Indeed, PE/VC firms represent an important segment of the capital market, with specialization to invest in high-growth innovative SMEs. PE/VC managers exercise superior selection, monitoring and governance that mitigate the uncertainty and risks of investing in such companies. Despite its successes in Brazil, PE/VC is still very much restrained by the challenging local economic and institutional environment. Thus, changes in the legal and fiscal system, simplification in bureaucratic procedures, and other such improvements will most likely result in a sensible growth in the Brazilian PE/VC industry, with positive impact in the SME access to finance in Brazil. Since most countries in Latin America share similar economic and institutional traits with Brazil, the path followed by the local PE/VC industry can serve as an example for other countries to learn with its successes and failures.

Private equity and venture capital in an emerging economy: evidence from Brazil

This article, based on the Brazilian experience, examines how Private Equity and Venture Capital (PE/VC) adapts to an emerging economy Our dataset is based on two extensive questionnaires answered by each of the 65 PE/VC organizations with offices in Brazil. The results reveal that a lack of infrastructure and security create investment opportunities. However, institutional idiosyncrasies represent a major barrier and force PE/VC – a U.S. investment model – to adapt by investing in different stages of business development, avoiding LBOs, taking a generalist industry approach, geographically concentrating in the financial cluster and relying on arbitration for dispute resolution.

Assesment of port governance in Brazil: a managerial perspective on the port of Santos

The role of maritime transportation within international trade was drastically revamped during the inception of the globalization process, which enhanced the contribution of ports in world economy as main logistics gateways for global production and trade. As a result, the relationship between ports and governments has changed. Devolution ideologies that had been applied in other industries decades ago were now being considered by governments for the port industry. Many central governments sought to extract themselves from commercial activities of ports and devolving this responsibility to local governments, communities or private entities. The institution of devolution programs also changed the governance structures of ports further influencing port performance. Consequently, the recent worldwide trend towards devolution in the port industry has spawned considerable variety of governance models that are now set in place around the world. While some countries opt for more decentralized structures others prefer to retain a centralization of powers. In this way some governments consider local features and national integration more than others, which ultimately influence the success of a port reform implementation. Nevertheless, the prime intent of governments is now to maximize the efficiency and performance of their domestic ports. This issue intends to examine the changed port governance environment in Brazil by determining how and why imposed port reforms of the Brazilian federal government have been affecting the overall performance of the national port system, over the last decades, using the Port of Santos as a sample upon an exploratory study. For that, the study will use a contingency theory-based framework – the Matching Framework - that views port performance as a function of the fit among the dimensions of external operating environment, strategy and structure of a port organization. In essence, the greater the fit among these dimensions the better the expected performance of a port will be, and vice-versa. Port managers, government officials and academics alike shall be interested in this document.

Main problems with the taxation of civil society organizations in Brazil: certifications and impact on payroll

The objective of this paper is to identify and analyze the main problems in the taxation—regarding both taxes themselves and compliance costs of taxation—of civil society organizations in Brazil. This study is qualitative descriptive research. A multiple case study with 26 organizations was performed. The results show that the problems mainly affect organizations with lower revenue and that do not work in the areas of education, health or social care. The main problems involve the taxation of the payroll and the difficulties related to obtaining and maintaining certifications. The study concludes with suggestions for the improvement of the regulatory framework.

Labor earnings dynamics in post-stabilization Brazil

This paper analyzes both the levels and evolution of wage inequality in the Brazilian formal labor market using administrative data from the Brazilian Ministry of Labor (RAIS) from 1994 to 2009. After the covariance structure of the log of real weekly wages is estimated and the variance of the log of real weekly wages is decomposed into its permanent and transitory components, we verify that nearly 60% of the inequality within age and education groups is explained by the permanent component, i.e., by time-invariant individual productive characteristics. During this period, wage inequality decreased by 29%. In the rst years immediately after the macroeconomic stabilization (1994

A new playing field: retrospective voting and soccer in Brazil

O propósito deste estudo é analisar o possível impacto que um viés emocional possa ter nos julgamentos dos eleitores. Nesse sentido utilizamos o futebol como fonte exógena de um choque. O nosso modelo de efeitos fixos nos leva a concluir que vitórias de equipes no final de semana da eleição estão associadas a maior votação no incumbente indicando que um viés emocional pode influenciar o eleitor.

Debt maturity determinants in Brazil: evidence from private and public corporate borrowings

This study provides an empirical investigation of the determinants of long-term debt maturity in Brazil. We built a unique database that includes privately placed debt and public debt for 308 publicly traded, non-financial Brazilian companies, from 2009 to 2013. We perform GMM panel analyses using as dependent variables the amount of long-term debt payable in more than one, three, and five years for total debt, BNDES (Brazilian Development Bank) debt and corporate bonds. The results show that the BNDES finances less risky firms, i.e., those that are larger, older, more tangible and more transparent. We also find support for information asymmetry theories, as companies with higher transparency levels have similar leverage levels relative to others but higher proportions of long-term debt in their capital structures. Regarding debt levels, we find that more levered companies are larger, less profitable, more tangible and have fewer growth opportunities. To our knowledge, this is the first paper to address the determinants of long-term debt maturity in Brazil that uses various specifications of long-term debt and that examines different types of debt.

The impact of mayor leadership on education: evidence from Brazil

What are the impacts of female mayors on education? It is well known that in Brazil, like in many other countries around the globe, women are underrepresented in political posts. Understanding the impacts of this discrepancy on policy choice and redistribution across many areas of inquiry is, therefore, an important research endeavor. Extant literature shows a strong link between women and the economic development of the areas they govern, specifically that they provide public goods relevant to the needs of women constituents. However, despite the efforts to explore the impacts of gender political leaders, we still do not know what is the consequence of gender on policy outcomes. Exploring a rich dataset on Brazilian municipalities, I intend to enrich the literature on the role of female politicians on politics. I employ a regression discontinuity design using Brazilian elections and indicators on education based on the basic education development index (IDEB), education expenditures and local policies. I find that municipalities where a woman enters into power do not perform better on education and do not present more investments or policies to improve education.

General (in-house) counsels in Brazil: career, professional profile and a new role

This paper discusses who the legal directors are in private companies in Brazil, emphasizing their profile, career, and performance, focusing on the period of 2008- 2013, investigating changes which have occurred to legal departments in those companies, and to legal directors’ careers. Our argument is that since the expansion of legal departments in Brazil in the 1990s, with expanding privatizing of companies and further opening of the Brazilian market to foreign capital, the profiles and careers of legal directors have undergone several transformations, culminating in more value and prestige being given to those professionals inside companies. This paper explores these transformations and the a series of implications generated for the corporate legal market in the country, ranging from changing the criteria for hiring professionals, to creating new demands for more sophisticated legal services.

The effects of a centralized college admission mechanism on migration and college enrollment: evidence from Brazil

No Brasil, a recente reformulação do Exame Nacional de Ensino Médio (ENEM) e a criação do Sistema de Seleção Unificada (SISU), um mecanismo de admissão centralizado que aloca os alunos às instituições, promoveram mudanças relevantes no Ensino Superior. Neste artigo, investigamos os efeitos da introdução do SISU na migração e evasão dos alunos ingressantes a partir dos dados do Censo de Educação Superior. Para tal, exploramos a variação temporal na adesão das instituições ao SISU e encontramos que a adoção do SISU está associada a um aumento da mobilidade entre municípios e entre estados dos alunos ingressantes em 3.8 pontos percentuais (p.p) e 1.6 p.p., respectivamente. Além disso, encontramos um aumento da evasão em 4.5 p.p. Nossos resultados indicam que custos associados à migração e comportamento estratégico são importantes determinantes da evasão dos alunos.