An informational perspective on administrative procedures

A number of scholars have identified the important role administrativeprocedures have in 'structuring' the interest group environmentof government agencies: determining who can participate andin what manner. Using a formal model, we analyze the incentivesand outcomes that different procedural - and therefore interestgroup - environments generate. The model yields a number ofimportant conclusions. First, because elected officials areconcerned not only about distributional rents, but also informationalones, the use of procedures in some cases will result in worseoutcomes for political principals on the policy dimension. Officialswill be willing to bear the losses in exchange for informationalgains. Second, under certain conditions, a politician is betteroff with a biased group monitoring the agency rather than aneutral one, since biased groups will subsidize a portion ofthe monitoring cost. Third, having multiple interest groups,including one in opposition to the politician, makes the politicalprincipal strictly better off than any other constellation ofmonitors, since competing interest groups will provide the greatestinformation at the lowest cost to the elected official.     

Review, analysis and classification of the literature on QFD—Types of research, difficulties and benefits

This paper presents a review, analysis, classification and codification of the literature on quality function deployment (QFD) produced between 2002 and 2006. The publications were classified into two main groups: conceptual research and empirical research. The studies focused more on quality matrix problem solving and the main difficulties are reported. However, few studies have been done on solutions for other important aspects. Further research is needed on how to reduce the difficulties of using QFD.     

Non-linear relationships between growth opportunities and debt: Evidence from quoted Portuguese companies

This paper analyses the relationship between growth opportunities and debt of quoted Portuguese companies using various panel estimators. The results show a cubic relationship between growth opportunities and debt. When companies' growth opportunities are low and high, the relationship between growth opportunities and debt is positive. For intermediate levels of growth opportunities, the results show the existence of a negative relationship between growth opportunities and debt. These results suggest that the relationship between companies' growth opportunities and debt is influenced by complex aspects in companies' capital structure decisions. The empirical results suggest that creditors recognize high growth opportunities when such opportunities exist, and debt is a way to discipline managers' actions in the presence of low investment opportunities. For intermediate levels of growth opportunities, the subinvestment problems seem to be relevant in explaining the relationship between growth opportunities and debt.     

The Brazilian Soccer Championship: an efficiency analysis

This article analyses the top Brazilian football league from 2003 to 2011 by estimating a cost function and using a stochastic frontier model. Among the covariates, the number of fans per club and club remoteness is taken into account. The Brazilian clubs are then ranked according to their technical efficiency during the 2000–2011 period. Based on the results, the policy implication is presented, and the economic implications arising from the study are also considered.     

Minority Faculty Hiring Power in Academe: an Economic Model

This paper investigates whether minorities in academe exercise bargaining power in a way that influences hiring of other minority faculty. We develop a stylized model that shows how minorities influence the hiring of other minorities, taking into account the hiring of majority faculty. We postulate that such behavior is similar to the behavior of insider workers in the context of the insider-outsider literature.     

The Role of Collateral in the Credit Acquisition Process: Evidence from SME Lending

This study tests the simultaneous impact of observed characteristics and private information on debt term contracts in a multi‐period setting, using a dataset of 12,666 credit approvals by one major Portuguese commercial bank during 2007–2010. The main results show that borrowers with good credit scores that know they have a high probability of success and are unlikely to default are more willing to pledge collateral in return for a lower interest rate premium (IRP). Furthermore, lenders tailor the specific terms of the contract, increasing both collateral requirements and the IRP from observed risk, for borrowers operating in riskier industries and with less credit availability. The results are robust to controls for joint debt terms negotiation and the degree of collateralization offered by the borrower.     

Investment–cash flow sensitivity and investor protection

We examine the role of country-level legal investor protection (i.e., shareholder and creditor protection) on firm investment–cash flow sensitivity (ICFS). Using underexplored research data on investor protection across 21 countries and working with a conservative empirical design, we extend prior literature on the relation between investor protection and ICFS and provide new evidence on how these country-level attributes interact to explain a firm's ICFS. We find that either the strong legal protection of minority shareholders or the strong legal protection of creditors reduces the sensitivity of investment to internal cash flow. However, in countries with strong levels of both minority shareholder and creditor protection, ICFS increases. Our results remain robust after controlling for several alternative explanations. The results support the argument that overregulation arises when policymakers increase investor protection at levels that lead firms to avoid external sources of finance, hampering firm investment. Our findings suggest that countries face a regulatory trade-off such that increasing investor protection (either shareholder or creditors protection) enhances financial markets efficiency, but excessive regulation can indeed lead to financial markets inefficiencies.     

How do different performance measures affect managerial time orientation? Empirical evidence from sales managers in the oil and gas industry

This study investigates the relative effect of performance measures on managerial time orientation. We collect survey data on the actual time allocation of sales managers for tasks that affect financial performance on the short-, medium-, and long-term horizons. In addition, we obtain survey data on the specific metrics used by an oil and gas firm and classify them into three groups: traditional accounting (gross margin and budgeted costs), nonfinancial (market share and sales volume), and accounting returns (economic value added — EVA). Based on partial least-squares analysis, our results suggest that, in our setting, both nonfinancial and accounting return measures can supplement traditional accounting metrics to mitigate potential short-term orientation by inducing sales managers to consider mainly not only sales tasks but also investing tasks, which will affect the firm results more than a quarter ahead. In addition, our results imply that accounting return metrics are not better than nonfinancial measures in inducing a longer-term orientation in our research setting.     

Estimating non-linear serial and cross-interdependence between financial assets

This paper proposes an approach based on copula families to determine shape and magnitude of non-linear serial and cross-interdependence between returns and volatilities of financial assets. It is evident the predominance of the student’s t copula in returns relationships. Association in tails is generally larger than the absolute. There is a fast decrease in association along time, but even after 5 days, there is still dependence between returns. For volatilities, Joe copula predominates in estimated bivariate relationships fit. Clayton copula rotated 180° (survival), Gumbel, BB6 and BB8 copulas also fit some relationships. The magnitude of lagged associations is larger for risks than returns. Persistence in the dependences is very high, and decreases very little after the first lag. The tail dependence has larger values than the absolute in most relationships. We present a practical application of the proposed approach, based on optimal investment allocation and risk prediction.