The Aggregate Behavior of Banks: A Proposal for Prudential Supervision

This study seeks to investigate a macroeconomic approach that could help bank regulators and supervisors perform their task of ensuring financial stability. To achieve this, an attempt is made to explain the behavior of banks by analyzing aggregate time series of credit lending and deposit-taking, which are the variables involved in financial intermediation. This article's main contribution is to present evidence of banks’ behavior in their role as financial intermediaries, in terms of the performance of the variables that represent their credit-granting or deposit-taking decisions. For this purpose the study used a vector autoregressive model to construct impulse response functions and the Granger test. The results demonstrate the existence of bilateral causality between credit lending and deposit--taking, suggesting that banks actively manage the financial intermediation process. In addition, the results show that shocks to deposits destabilize the credit lending process, and credit supply shocks, in turn, destabilize deposit-taking. The latter result is important for understanding how financial instability can arise, and is thus relevant for the bank regulator.     

Modeling to Relate Variables in the Context of Franchises in Brazil

The central objective of the research is to propose a model for the comparative study of the degree of relationship between the variables considered as most relevant in the context of franchises in Brazil. In terms of methodology, the research undertook a qualitative survey of the variables, which in a second phase provided a quantitative framework in order to fulfill the proposed objective, through concepts based on multicriteria methods, performance measurement systems, and linear correlation. Resulting from the practical implementation proposed for the General Food category, it was found that only two constants, denoted “Average Initial Investment” and “Financial Obligations,” are directly related to the base variable defined by “Gross Revenues.”     

Investment in online advertising and return on sales: Does it pay to outsource the services to an advertising agency?

Abstract

The effect of investing in online advertising on a firm’s financial outcomes can depend on whether or not the development and implementation of advertising campaigns are managed by advertising agencies. Agencies may have experienced professionals or workload to perform these jobs, but the costs are greater. This paper aims to investigate the effects of investments in digital marketing on the financial outcome of a company’s services, comparing whether or not it is outsourced to advertising agencies. The secondary data relates to services advertised and marketed by a firm. We tested the possible moderating effect of outsourcing the service in the relationship between investment in online advertising (Google and Facebook) and return on sales (profit margin), by controlling the effect of covariates. Through four regression analyses, the results showed that outsourcing the service moderates the relationship. Specifically, the higher the amount of advertising investment, the more it pays to outsource the service to an advertising agency in order to generate greater profit margin. But with a low investment value, it does not pay to outsource. This study helps to identify situations in which it pays to outsource digital marketing services to an advertising agency.     

Efficiency and performance in gas distribution. Evidence from Brazil

This article analyses the current state of the gas distribution industry in Brazil, by identifying the main factors that determine its efficiency. In order to test the performance of the industry, we have calculated the firms’ technical efficiency during the period 2001–2009. We analyse whether some economic and technological factors as consumer density, load factor or regulation, among others, have affected the performance of this industry. We show that companies serving markets with different customer characteristics (diversification) have reached higher levels of efficiency and evolved faster. Moreover, the private ownership and price cap regulation are more efficient in relation to public ownership and cost of service regulation. These findings are important to support the improvement of the regulation of gas distribution in the Brazilian states.     

Economic integration and regional convergence: effects of NAFTA on local convergence in Mexico, 1980–2008

Continental integration processes can alter traditional development axes. Paelinck and Polèse´s work in 1999 explains that in the case of Mexico there is a tension between the U.S. border and the rest of the country: Mexico´s integration in the NAFTA should have reduced the U.S. border attraction, extending the growth to territories located between this border and Mexico City. To test this hypothesis, we propose a spatial conditional β-convergence model that uses as regressors both the distances to the U.S. border and to Mexico City, together with other control variables. This model is applied to the period from 1980 to 2008 using GVA at the municipality level. Working with municipal-level data allows to observe convergence patterns across space and identify the effects of location. The time-span studied distinguishes between before and after NAFTA. Estimates based on Mundlak´s approach were obtained for time-invariant regressors. Results show that during the pre-NAFTA period there was a general process of convergence, but it is mainly explained by the faster growth of municipalities located near to the U.S. border. However, post-NAFTA, convergence in municipalities disappeared and the effect of distance to the U.S. border reversed its sign, as predicted in Paelinck and Polèse´s model.     

Coaches’ migration: a qualitative analysis of recruitment,motivations and experiences

This study examines sport coaches’ perceptions about their experiences abroad. Coaches are part of a diverse new set of mobilities occurring in the sport labour market. However, few authors explored the individual cases of coaches’ migration. Here, we examine coaches’ recruitment process, motivations to migrate and their experiences abroad. Participants were five migrant coaches chosen through purposive sampling to achieve a pool of deep and rich data regarding the research topic. Data was collected using semi-structured interview questionnaires. For the exploration and analysis of the qualitative data, we used MAXQDA 11 software package. The results showed that all coaches migrated through an informal mechanism of recruitment which relied on their networks. Their discourse suggested they fit three types of migration referred in the literature: ambitionist, cosmopolitan and pioneer. Their experiences abroad were mainly related to their professional career and adaptation. All coaches reported that their experience was positive and they recommend that other coaches migrate as well. These results are important for the understanding of sport migration not least because coaches are at the core of the migration process of various stakeholders.     

Lessons learned from Brazilian multinationals’ internationalization strategies

Internationalization of emerging market multinationals is a recent phenomenon gaining importance in the global economy. This foreign expansion of a new breed of companies has challenged established theories and practices in the field of international business (Cuervo-Cazurra, 2007). This article addresses the issue of whether or not there is something to learn from these emerging market companies and their foreign expansion. Focusing on the international trajectories of four Brazilian multinationals (i.e., Odebrecht, Embraer, Stefanini, and Marcopolo), this study analyzes their strategies and managerial processes during and after the recent economic crisis with regards to internationalization. Our qualitative fieldwork suggests that the trajectories of these Brazilian multinationals are quite unstructured and evolve as a reaction to the opportunities they face in international markets. It seems all four companies in our sample shared a strong entrepreneurial spirit and a high motivation to expand their international operations despite the crisis and the obstacles they faced. Our findings and suggestions in terms of lessons learned should provide valuable implications for multinational managers from other emerging markets by providing a better understanding of how Brazilian multinationals expand internationally, deal with economic crisis, and manage relationships with local and foreign institutions.     

Relatedness of decisions in business services outsourcing

The literature of service outsourcing is mainly focused on case studies or specific service activities. However, there is no evidence about the pattern of relatedness among outsourcing of services. This paper analyses this issue by a relatedness index previously applied in the framework of product and technological diversification. The index is applied to analyse the degree of relatedness for outsourcing decisions among an array of fourteen services in a large data set of Spanish manufacturers in 1990–2006, detecting four time-constant clusters. An econometric analysis tests the alternative explanations about this pattern of joint decisions, based on shared knowledge and on workers' expertise.     

Re-scaling risk governance using local appraisal and community involvement

This paper describes a risk governance model applied on a local scale, showing the advantages and constraints found during its application. The risk governance model, built on a municipal scale, results from the application of the International Risk Governance Council framework. The model is characterised by the cyclicity between the assessment and management spheres, assuming communication to be essential in all stages. Its application in central Portugal is rooted in a specific knowledge of hazards and their impacts, the human and financial constraints, and the expectations of citizens and stakeholders. The results show that preformatted management solutions derived from national civil protection stakeholders can be adapted to a local physical, social and institutional context. It was found that this depends significantly on the stakeholders’ concerns assessment, as this allows the subsequent risk management options to be adapted and legitimised. As a result, more appropriate land-use regulations and mitigation strategies are being designed, which are related to urban planning, road design, risk sensitisation and communication tools. However, two features are likely to lead to an overlapping of competences and conflicts concerning responsibility for decision-making in the actual civil protection structure: the current constraints on resources on an operational level and the potentially inadequate representation of stakeholders on a strategic level.     

Durable goods,financial frictions,and business cycles in emerging economies

Business cycles in emerging economies display very volatile consumption and strongly countercyclical trade balance. We show that aggregate consumption in these economies is not more volatile than output once durables are accounted for. Then, we present and estimate a real business cycles model for a small open economy that accounts for this empirical observation. Our results show that the role of permanent shocks to aggregate productivity in explaining cyclical fluctuations in emerging economies is considerably lower than previously documented. Moreover, we find that financial frictions are crucial to explain some key business cycle properties of these economies.