Access to finance,working capital management and company value: Evidences from Brazilian companies listed on BM&FBOVESPA

In this research, we have analyzed the impact of financial leverage on the relationship between working capital and company value and how financial constraints on access to financing affect this relationship. In addition, we have analyzed the relationship between working capital and company value. Using a sample of Brazilian public companies listed on BM&FBOVESPA from 1995 through 2009, we found evidence for the following conclusions: an extra Real (R$) of investment in working capital is significantly less worth, on average, than an extra Real (R$) of investment in cash; and, on average, increasing the level of working capital at the beginning of a fiscal year reduces company value.     

Coming out of the shadows? Estimating the impact of bureaucracy simplification and tax cut on formality in Brazilian microenterprises

This paper evaluates the impact of a program of bureaucracy simplification and tax reduction on formality among Brazilian microenterprises — the SIMPLES program. We document an increase of 13 percentage points in formal licensing among retail firms created after the program when compared to firms in ineligible sectors. The impact on retailers is robust to a series of tests. We find no impact on construction, transportation, services and manufacturing sectors.     

The interactive effects of goal orientation and leadership style on sales performance

The authors develop and test a model depicting the moderating effects of different types of manager leadership styles on the relationship between salesperson goal orientations (i.e., performance orientation and learning orientation) and performance. The two surveys were set in retail work contexts in Brazil. Results from a multi-level hierarchical analysis demonstrate that (i) transactional leadership strengthens the positive link between learning orientation and sales performance, whereas (ii) transformational leadership weakens the positive association between learning orientation and performance. Our argument for the positive moderating effect of transactional leadership is built upon the path-goal theory and contingent reward mechanism. The justification for the negative effect of transformational leadership involves the follower-dependency logic and overdependence on supervisory cues.     

Testing Household-Specific Explanations for the Inverse Productivity Relationship

The inverse relationship between land productivity and farm size is an old and puzzling empirical regularity. Most explanations for this relationship rely on market imperfections that jointly determine the farm size and the household's shadow price of some productive inputs. We use plot-level data from the ICRISAT/VLS to assess whether these household-specific theories can explain the puzzle. The data exhibit plots of different sizes being simultaneously cropped by the same household. The inverse relationship is shown to hold true with the same magnitude across the plots of each household, thus cross-household heterogeneity does not suffice to explain the puzzle.     

Polymyxin B and colistin—the economic burden of nephrotoxicity against multidrug resistant bacteria

Background: Polymyxin B and colistin are nephrotoxic drugs used in the treatment of carbapenem-resistant Enterobacteriaceae. The aim of this study is to evaluate the burden of costs due to polymyxin associated AKI and propose a simulated break-even price for new therapies.

Methods: The pharmacoeconomic model is based on two large cross-sectional studies of polymyxin nephrotoxicity. Total direct costs in patients with and without renal failure were compared. The direct cost of each hemodialysis section (USD82.94) and daily hospital charges (USD934.85) were based on the values used in a major public hospital in the city where the clinical study was performed. The break-even price of new drugs was simulated considering eventual new drugs as effective as polymyxins, but less nephrotoxic in different percentages. Outcomes of patients after hospital discharge were not evaluated.

Results: Total direct cost of the group of patients who survived without AKI was significantly lower than total direct cost of the groups either with AKI or the group who died without AKI. There was a tendency of even higher costs in those who died with AKI and dialysis. Direct cost of hemodialysis was not as important as the longer hospitalization after sepsis. Considering daily cost of polymyxin is USD60, drugs with 50% less AKI could be considered cost-beneficial if the daily cost is lower than USD160.

Conclusions: AKI in patients with carbapenem-resistant Enterobacteriaceae treated with polymyxin increases both length of stay in hospital and total costs.     

Management in a complex scenario: World Cup,alternative stadiums and demand for tickets

This paper analyses a particular managerial problem that sports clubs face from time to time. The aim is to identify the effects that alternative stadiums and stadiums' features have in ticket prices and demand. Simultaneous equations models by three-stage least square estimator using instrumental variables is the method employed. The findings evidence that alternative stadiums negatively impact attendances, but clubs can offset this effect playing at high-quality alternative stadiums. Results also evidence that fans care about security levels. Some policies for football leagues are discussed as limits in the use of alternative stadiums, league fixtures and hard requirements concerning security.     

Eliminating entry barriers for the provision of banking services: Evidence from ‘banking correspondents’ in Brazil

This paper shows that the contractual arrangement of ‘banking correspondents’ has eliminated entry barriers for the provision of banking services in Brazil. With the bank correspondents, banks are allowed to reach the almost 2200 municipalities without bank branches in 2000, connecting 45 million people to the financial sector. The evidence is based on the estimation of an entry model of financial providers in Brazilian municipalities. I estimate a zero population entry threshold for banking correspondents for the period from 2002 to 2007. The estimated population entry thresholds for bank branches in the same period are relatively stable at approximately 8000–9000 people. The population entry thresholds for the second to fifth players for banking correspondents are also consistently lower than those for bank branches.     

Smoke and Mirrors? Disclosures in the Marijuana Industry in Canada

Licensed producers (LPs) of marijuana in Canada are embedded in a highly competitive industry where they raise funds from investors to finance their growth. They face substantial risks from the uncertain legal status of marijuana and from its unsettled health and safety consequences. We argue that this context stands to have implications for the disclosures of firms in the marijuana industry. We rely on a multicase study of three large Canadian LPs to explore their mandatory and voluntary disclosures during the third quarter of 2018. We find that their mandatory interim disclosures are largely consistent with disclosure rules that target marijuana operations. We also find that they make voluntary disclosures relevant for their context (e.g., about risks from legal, health, and safety consequences), and that there is variation in these disclosures. We use our findings as a springboard for discussing the antecedents of mandatory and voluntary disclosures in the marijuana industry (i.e., proprietary costs, investor interest, detection costs of selective disclosures), and their consequence (i.e., lack of comparability). We offer suggestions for future research.     

The interplay between home and host institutions on CBA ownership decision

Cross-border acquisitions (CBAs) are one of the key strategies for internationalization. However, most of what is known about CBA strategies relies on the effects of the host country's environment or the home country's conditions. In this article, we analyze the interplay between these two important factors. We show that companies from less institutionally developed countries are more influenced by poor institutional conditions found in host countries. We analyzed a dataset of 1,390 cross-border acquisitions performed by Latin American firms. The literature on the subject points out that less developed host environments lead to fewer shares of ownership acquired in CBAs. However, we confirmed that the quality of the home country's institutional environment positively moderates the effects of the host environment over ownership choice in the acquisition. This effect is due to companies from less developed environments being able to use their embedded capabilities to better navigate faulty institutional environments abroad.