Multiples’ Valuation: The Selection of Cross-Border Comparable Firms

We studied whether mean industry multiples are similar in Brazil and in the United States. Using multilevel models (hierarchical linear model and additive crossed random-effects model), we concluded that there exists significant variability within firms from the same industry and significant variability between countries (Brazil and United States). The same tests were applied to firms grouped in clusters by similarity of economic fundamentals and we concluded that part of the variability shifts from (a) the variability within firms from the same industry and the variability between countries to (b) the variability between clusters, which is desirable in multiples’ valuation.     

Knowledge transfer among the small businesses of a Brazilian cluster

This study verifies how knowledge is transferred among small businesses operating in industrial clusters, how this competitive resource circulates and is accessed within the cluster. Interfirm cooperation, industrial support institutions, workforce mobility and social ties, concepts highlighted in the literature as dimensions of the knowledge transfer process, were used to structure the survey instrument, which was applied in the cluster that leads Brazilian furniture exports. Questionnaire responses were received from 198 firms and submitted to factor analysis. Conclusions and theoretical contributions of the study are that: (i) the knowledge transfer process is multi-dimensional; (ii) knowledge transfer can occur in clusters even in the absence of interfirm cooperation; (iii) the dimensions of the process can be combined in various ways to facilitate knowledge transfer; (iv) this combination may differ from cluster to cluster; and (v) producers are more likely than suppliers to perceive and access knowledge available in the cluster.     

Accounting for financial instruments: An analysis of the determinants of disclosure in the Portuguese stock exchange

This paper studies the determinants of disclosure level in the accounting for financial instruments of Portuguese listed companies. An index of disclosure based on IAS 32 and IAS 39 requirements is computed for each company. The analysis includes variables that capture intrinsic features of Portuguese companies and institutional regulatory context, such as capital structure and characteristics of the corporate governance structure, within contingency theory. We could not find any significant influence of corporate governance structure or of financing structure. We conclude that the disclosure degree is significantly related to size, type of auditor, listing status and economic sector. This research reveals areas for improvement of Portuguese companies' reporting practices and suggests areas for intervention of the Portuguese capital markets regulator in the context of mandatory IAS after 2005.     

The end of Brazilian big inflation: lessons to monetary policy from a standard New Keynesian model

The paper analyzes economic stabilization in Brazil in the context of a New Keynesian model estimated with Bayesian techniques. Dataset covers the period 1975–2012. Our methodology is based on tests for multiple structural breaks at unknown dates and counterfactual exercises. The results show that inflation and output volatility present an inverted U-shape pattern, peaking at the 1985–1994 sample. Changes in the monetary policy stance and milder shocks accounted for the reduced inflationary volatility (about 50% each, in some specifications). However, some assumptions indicated that a sharp decline in the Phillips curve slope was also important for controlling inflation. Concerning to output, the sole explanation for its volatility fall seemed to be smaller shocks. Therefore, we conclude that a mix of the “good luck” and “good policy” hypotheses mainly originated the current period of increased stability in the country.     

Human extinction scenario frameworks

It is a natural human instinct to wonder about the future. Some have long speculated about the various events that could potentially lead to the extinction of the human race. While a dark subject, the point of exploring factors that could drastically impact the ability to sustain life on our planet has utility in preparing for events of this nature. It is in the spirit of learning how to change before catastrophe strikes that such wondering occurs.     

The Way into Bankruptcy: Market Anomie and Sacrifice Among Portuguese Consumers

Portugal ranks among the EU27 countries with higher levels of consumer indebtedness. Contrary to the trend observed in countries with similar indebtedness rates, Portugal has one of the lowest rates of consumer default. Previous studies (e.g., Frade et al. 2006) have identified three strategies that have contributed to keep levels of credit default low: reliance on savings, financial support from relatives and friends, and cuts in household expenses. These strategies have been widely used for the last decade and have been strained since the very beginning of the global financial crisis in 2007. We argue that these three strategies are near to collapse and consequently the levels of consumer default will rise steeply in the next years. The savings rate in Portugal has been declining over time, and the social networks are limited in their action due to the current crisis that affects everyone. In this article, we advance the hypothesis that sacrificing living standards is rooted on collective beliefs about the current economic crisis in Portugal and trust in political and market agents in line with the Theory of Market Anomie (Karstedt and Farrall 2006). The conclusions are based on macroeconomic statistics and on the results of a Web survey of 1244 Portuguese households, which focuses on attitudes towards the financial crisis, trust in political and economic institutions, and strategies to cope with the crisis. The results show that trust in financial companies (banks and insurance companies) and in the European Parliament promotes a sense of empowerment to contribute to the country economic restoration. This attitude induces citizens to avoid default by sacrificing living standards. But in the current austerity context, with low levels of trust in political institutions and detachment of the economy, consumers will be less prone to sacrifice. In this scenario, credit default and insolvency is expected to rise especially in those households most exposed to unemployment and to cuts in social benefits. This reality puts a huge and growing pressure on bankruptcy procedure, civil courts, and economic and social policies. Some adjustments should be made to the Portuguese Bankruptcy Code by facilitating and simplifying the bankruptcy regime in order to accommodate the increase in insolvency cases. But the improvement of the insolvency procedure will not resolve the situation of financial distress if the structural causes persist, such as unemployment and deterioration of salaries, and cuts in social benefits. A reform of the Bankruptcy Code facilitating and simplifying the bankruptcy regime should be coupled with measures that boost the economy and stimulate the labour market. Otherwise, Portuguese households will not have the resources necessary to benefit from the bankruptcy process and regain the control over their financial lives.     

Assessing economic complexity as interindustry connectedness in nine OECD countries

Economic complexity can be defined as the level of interdependence between the component parts of an economy. In input–output systems interindustry connectedness is a crucial feature of analysis, and there are many different methods of measuring it. Most of the measures however, have important drawbacks to be used as a good indicator of economic complexity, because they were not explicitly made with this purpose in mind. In this paper, we present, discuss and compare empirically different indexes of economic complexity as intersectoral connectedness, using the inter-industry tables of nine OECD countries. According to most of the measures of connectedness large economies (USA, Japan) tend to be more complex than small economies (for example, Denmark). But if another type of measures is considered, the opposite conclusion is drawn, signalling a hidden characteristic of interdependence that so far has not been detected by conventional measures. This result should qualify the widespread idea that more interconnected productive structures propagate more intensely exogenous shocks and/or economic policy measures.     

Green Product Development and Product Portfolio Management: Empirical Evidence from an Emerging Economy

Few studies have explored the relationship between green products development (GPD) and product portfolio management (PPM). When considering evidence from emerging economies, the knowledge gap is even deeper. Consequently, the objective of this work is to analyze how green and traditional practices of new product development (NPD) influence product portfolio and NPD performance. In addition, we explore how GPD opens new markets and technology opportunities. The empirical evidence is based on a sample of firms that are developing products and belong to innovative industrial sectors in Brazil. In general, the framework developed and tested in this research indicates the following: (i) the adoption of GPD practices significantly influences product portfolio performance; (ii) the adoption of GPD practices tends to generate positive results with regard to obtaining technological and market opportunities; (iii) the adoption of traditional PPM practices influences the dependent factors. Unexpectedly, correlations between a firm's size or age and its performance were not confirmed. This is the first empirical evidence relating GPD, PPM, and market and technology opportunities in Brazil. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

From Self-Interest Motives to Justice Motives: The Challenges of Some Experimental Results

A bstract .   This article begins by presenting experimental evidence that remains unexplained by standard and utility-extended economic models: experimental subjects tend to honor their promises even on occasions when an assessment of consequences asks them to defect; subjects voluntarily contribute to collective goods, and this contribution is highly conditional on others contributing as well; subjects evaluate and value the intentions behind actions as well as the consequences of actions. Arguments are sought for in moral philosophy that would more plainly explain the collected experimental evidence and that would help economists revise their explanatory frames. The hypothesis advanced is that the observed behavior may be interpreted as resulting from the moral strength of indignation and justice norms.     

Innovation efforts and performances of Brazilian firms

We analyze the relationship between innovation and firms' performance in Brazil using a comprehensive database that cross-references innovation information by PINTEC (Technological Innovation Research) of the IBGE (Brazilian Institute of Geography and Statistics) and financial information from Serasa and Gazeta Mercantil. Results from the structural equation modeling suggest that variables associating with investments in innovation, which are connected to the innovative effort of a company, do not explain financial performance significantly.