Relevance or irrelevance of capital structure?

In this paper we examine the effects of asymmetric information on the nature of financial equilibrium and on the capital structure of firms. In the first model presented, the financial contracts on offer involve pooling equilibrium with no adverse selection. However, in the special case analyzed, where contracts are of mixed form, there may be a separating equilibrium and also equilibrium may not exist. Interesting result is that the separating equilibrium found is not economically efficient since aggregate investments falls short of first-best level. More importantly, capital structure does matter. The relative magnitude of outside equity makes a real difference to the quantity of aggregate investment in equilibrium.

A hidrovia Tietê-Paraná e a intermodalidade no Estado de São Paulo

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

Reestruturação, internacionalização e novos territórios de acumulação do Grupo Votorantim

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

Capital Works Procurement: The Selection of a Building Procurement Method

The determination of the most appropriate procurement method for capital works projects is a challenging task for the Department of Housing and Works (DHW) and other Western Australian State Government Agencies because of the array of assessment criteria that are considered and the procurement methods that are available. A number of different procurement systems can be used to deliver capital works projects such a traditional, design and construct and management. Sub-classifications of these systems have proliferated and continue to emerge in response to market demands. The selection of an inappropriate procurement method may lead to undesirable project outcomes. To facilitate DHW in selecting an appropriate procurement method for its capital works projects, a six step procurement method selection process is presented. The characteristics of the most common forms of procurement method used in Australia are presented. Case studies where procurement methods have been used for specific types of capital works in Western Australia are offered to provide a reference point and learning opportunity for procurement method selection.

Firm social, cultural and intellectual capital : strategic indicators of international client satisfaction

Despite the increasing significance of the construction industry as an emerging sector of the Australian economy, there is inadequate research performed on construction design firms in terms of theoretical and empirical foundations. Although past research has identified the barriers and success factors for firm market entry, evidence suggests that to date no research has explicitly explored the sustainability of construction design firms in international markets. SMEs and their approach to firm internationalisation differ significantly from large manufacturing firms and a vast majority of construction design firms operate as SMEs. This paper develops a sustainable business model for construction design SMEs, which rely upon the development of clear Client Following (CF) versus Market Seeking (MS) strategies to support internal firm strategic and operational management. The understanding of these strategies is vital as the application of either will shape the design management approach of firms, which would in turn impact on the sustainability of these firms in foreign markets. Long-term sustainability of firms in international markets relies heavily upon client satisfaction. Client and project team participants’ communication during various design processes has often been problematic and the added difficulty of communicating across international boundaries further compounds the problem of capturing and maintaining client’s requirements. Therefore this paper develops a model for economic sustainability of Australian construction design firms working in international markets by exploring factors that affect client satisfaction across international boundaries, through the development of business performance indicators. These include not only the critical financial capital but also other ‘softer’ indicators, namely: social, cultural and intellectual capital. These act as a firm’s measure of success and the acquisition of this type of capital will provide significant advantages to firms’ success, hence sustainability in international markets.

The ideological context of business : capital

This chapter focuses on the major social ruptures and developments that are most significant in the historical emergence and development of Capital and, more precisely, on those ruptures that highlight the most significant ethical issues upon which Capital, as a form of social organisation, is premised. Capital is most often viewed as a system of relationships between “things”, like land, labour, machinery, money, and so on. But this is to obscure the human relationships within which Capital flourishes.

Anthony Browne and the cultural capital of classic fairy tales

Prolific British author/illustrator Anthony Browne both participates in the classic fairy-tale tradition and appropriates its cultural capital, ultimately undertaking a process of self-canonisation alongside the dissemination of fairy tales. In reading Browne’s Hansel and Gretel (1981), The Tunnel (1989) and Into the Forest (2004), a trajectory emerges that moves from broadly intertextual to more exclusively self-referential modes of representation which reward readers of “Anthony Browne”, rather than readers of “fairy tales”. All three books depict ‘babes in the woods’ stories wherein child characters must negotiate some form of threat outside the home in order to return home safely. Thus, they represent childhood agency. However, these visions of agency are ultimately subordinated to logics of capital, which means that child readers of Browne’s fairy-tale books are overtly invited to identify with children who act, but are interpellated as privileged if they ‘know’. Bourdieu’s model of ‘cultural capital’ offers a lens for considering Browne’s production of ‘value’ for his own works within a broader cultural landscape which privileges literary fairy tales as a register of juvenile cultural competency. If cultural capital can be formulated most simply as the symbolic exchange value of approved modes of knowing and being, it is clearly helpful when trying to unpack logics of meaning within heavily intertextual or citational texts. It is also helpful thinking about what kinds of stories we as a culture choose to disseminate, choose to privilege, or choose to suppress. Zipes notes of fairy tales that, “the genre itself becomes a kind of institute that is involved in the socialization and acculturation of readers” (22). He elaborates that, “We initiate readers and expect them to learn the fairy-tale code as part of our responsibility in the civilizing process” (Zipes 29), so it is little wonder that Tatar describes fairy tales as “a vital part of our cultural capital” (xix). Although Browne is clearly interested in literary fairy tales, the most obvious strategies of self-canonisation take place in Browne’s work not in words but in pictures: hidden in plain sight, as illustration becomes self-reflexive citation.

Social Procurement: Promoting the sustainability of NPOs through the transformation of economic, social and cultural capital

Social procurement provides a key source of income for the Third Sector, and is vital for the sustainability of many nonprofit organisations. Social procurement involves the exchange of economic capital from one organisation, typically government (although for-profit and non-profit organisations can also purchase), with a nonprofit organisations in order to deliver other forms of. It is this transformation of economic capital into other forms of capital (cultural, human, social) in the social procurement process, which is the focus of this paper. Four case studies, which are representative of the four main types of social procurement, will be examined in order to trace how economic capital is transformed into other types of capital in each of these cases. In so doing, the paper will advance our understanding of social procurement theoretically, and lead to a wider discussion about the role of social procurement in ensuring the sustainability of nonprofit organisations, and the civil societies in which they operate.

Students' cultural capital : a study of assessment for learning as a field of exchange

This study was conducted within the context of a flexible education institution where conventional educational assessment practices and tests fail to recognise and assess the creativity and cultural capital of a cohort of marginalised young people. A new assessment model which included an electronic-portfolio-social-networking system (EPS) was developed and trialled to identify and exhibit evidence of students' learning. The study aimed to discern unique forms of cultural capital (Bourdieu, 1986) possessed by students who attend the Edmund Rice Education Australia Flexible Learning Centre Network (EREAFLCN). The EPS was trialled at the case study schools in an intervention and developed a space where students could make evident culturally specific forms of capital and funds of knowledge (Gonzalez, Moll, & Amanti, 2005). These resources were evaluated, modified and developed through dialogic processes utilising assessment for learning approaches (Qualifications and Curriculum Development Agency, 2009) in online and classroom settings. Students, peers and staff engaged in the recognition, judgement, revision and evaluation of students' cultural capital in a subfield of exchange (Bourdieu, 1990). The study developed the theory of assessment for learning as a field of exchange incorporating an online system as a teaching and assessment model. The term efield has been coined to describe this particular capital exchange model. A quasi-ethnographic approach was used to develop a collective case study (Stake, 1995). This case study involved an in-depth exploration of five students' forms of cultural capital and the ways in which this capital could be assessed and exchanged using the efield model. A comparative analysis of the five cases was conducted to identify the emergent issues of students' recognisable cultural capital resources and the processes of exchange that can be facilitated to acquire legitimate credentials for these students in the Australian field of education. The participants in the study were young people at two EREAFLC schools aged between 12 and 18 years. Data was collected through interviews, observations and examination of documents made available by the EREAFLCN. The data was coded and analysed using a theoretical framework based on Bourdieu's analytical tools and a sociocultural psychology theoretical perspective. Findings suggest that processes based on dialogic relationships can identify and recognise students' forms of cultural capital that are frequently misrecognised in mainstream school environments. The theory of assessment for learning as a field of exchange was developed into praxis and integrated in an intervention. The efield model was found to be an effective sociocultural tool in converting and exchanging students' capital resources for legitimated cultural and symbolic capital in the field of education.

Re-conceptualising rural resources as countryside capital: The case of rural tourism

Brian Garrod, Roz Wornell and Ray Youell (2006). Re-conceptualising rural resources as countryside capital: The case of rural tourism. Journal of Rural Studies, 22 (1), 117-128. RAE2008

The effect of ownership structure, country governance, and financial development on the capital structure of unlisted eastern European firms

This paper investigates the determinants of capital structure for a sample of 20,713 unlisted firms from 11 eastern European countries over the period 1994-2004. We employ usual firm-specific financial variables as well as country-specific variables that describe the degrees of governance structure and financial development of each country. Using regression analysis, our results indicate that firm ownership concentration and country governance structure are insignificant explanatory variables to the degree of leverage of the firms in our sample. On the other hand, indicators of country financial development are robust determinants of capital structure. However, the marginal explanatory power of country-specific variables is small. We conclude that firm-specific characteristics are decisive in capital structure.

The Cost of Sustainability Capital and the Creation of Sustainable Value by Companies

We develop and apply a valuation methodology to calculate the cost of sustainability capital, and, eventually, sustainable value creation of companies. Sustainable development posits that decisions must take into account all forms of capital rather than just economic capital. We develop a methodology that allows calculation of the costs that are associated with the use of different forms of capital. Our methodology borrows the idea from financial economics that the return on capital has to cover the cost of capital. Capital costs are determined as opportunity costs, that is, the forgone returns that would have been created by alternative investments. We apply and extend the logic of opportunity costs to the valuation not only of economic capital but also of other forms of capital. This allows (a) integrated analysis of use of different forms of capital based on a value-based aggregation of different forms of capital, (b) determination of the opportunity cost of a bundle of different forms of capital used in a company, called cost of sustainability capital, (c) calculation of sustainability efficiency of companies, and (d) calculation of sustainable value creation, that is, the value above the cost of sustainability capital. By expanding the well-established logic of the valuation of economic capital in financial markets to cover other forms of capital, we provide a methodology that allows determination of the most efficient allocation of sustainability capital for sustainable value creation in companies. We demonstrate the practicability of the methodology by the valuation of the sustainability performance of British Petroleum (BP).

Capital substitutability and weak sustainability revisited: The conditions for capital substitution in the presence of risk

The capital approach is frequently used to model sustainability. A development is deemed to be sustainable when capital is not reduced. There are different definitions of sustainability, based on whether or not they allow that different forms of capital may be substituted for each other. A development that allows for the substitution of different forms of capital is called weakly sustainable. This article shows that in a risky world and a risk-averse society even under the assumptions of weak sustainability the circumstances under which different forms of capital may be substituted are limited. This is due to the risk-reducing effect of diversification. Using Modern Portfolio Theory this article shows under which conditions substitution of different forms of capital increases risk for future generations.

The cyclical behavior of bank capital buffers in an emerging economy: size do matters

Using a panel of Colombian banks and quarterly data between 1996:1 and 2010:3, we study the relationship between short-run adjustemnts in bank capital buffers and the business cycle. We follow a partial adjustment framework and control for several variables that have been identified as important determinants of bank capital buffers in previous studies, and find that bank capital buffers vary over the business cycle. We are able to identify a negative co-movement of capital buffers and and the business cycle. However, we also find that capital buffers of small and large banks behave asymmetrically during the business cycle. While the former appear to be constant over time, once the appropriate set of control variables is used, the latter present a countercyclical behavior. Our results suggest the possible need of the implementation of regulatory policy measures in developing countries

Cross-country effects of regulatory capital arbitrage

One reason for the recent asset price bubbles in many developed countries could be regulatory capital arbitrage. Regulatory and legal changes can help traditional banks to move their assets off their balance sheets into the lightly regulated shadows and thus enable regulatory arbitrage through the securitized sector. This paper adopts a global vector autoregression (GVAR) methodology to assess the effects of regulatory capital arbitrage on equity prices, house prices and economic activity across 11 OECD countries/ regions. A counterfactual experiment disentangles the effects of regulatory arbitrage following a change in the net capital rule for investment banks in April 2004 and the adoption of the Basel II Accord in June 2004. The results provide evidence for the existence of an international finance multiplier, with about half of the countries overshooting U.S. impulse responses. The counterfactual shows that regulatory arbitrage via the U.S. securitized sector may enhance the cross-country reallocation of capital from housing markets towards equity markets.