Do shareholder protection and creditor rights have distinct effects on the association between debt maturity and ownership structure?

This study examines the effects of the firm's ownership concentration and its institutional environment on corporate debt maturity choices. As ownership concentration and debt maturity are alternative governance mechanisms, we theorize and investigate whether their association is influenced by country-level governance factors that enhance outside monitoring by minority shareholders and debtholders. Our investigation is based on a dataset of 50,599 firm-year observations from 38 countries. We use a propensity-score matching approach and find that the effect of ownership concentration on debt maturity is conditional to country-level governance attributes. Ownership concentration has a negative effect on debt maturity in countries where both shareholder protection and creditor rights are weak. Ownership concentration, however, tends to lengthen debt maturity as protection increases, and this positive effect on the length of debt maturity is stronger in countries enhancing protection towards debtholders (instead of shareholders). We also explore other characteristics of ownership structure, such as the identity and presence of controlling shareholders. These results corroborate the view that entrenched shareholders may use debt maturity opportunistically. Our study provides new insights into the interplay between firm- and country-level governance mechanisms and a deeper understanding of cross-country differences in the association between ownership structure and debt financing.     

‘Keeping up with the (Portuguese) Joneses’—a study on the spatial dependence of municipal expenditure

Municipalities tend to replicate the size and the composition of their neighbours’ expenditures, independently of being ruled by left-wing or right-wing parties. This is one important conclusion of the study, which includes spatial dependence to explain the value of Portuguese municipalities’ direct awards. We used observations for the 308 Portuguese municipalities from 2009 to 2015. We then tested this spatial dependence for the mean value (per contract of direct award) and we controlled the results considering the demographic characteristics of each municipality, the political wing of the ruling party at the municipality, and the composition of the municipal expenditures.     

Testing for optimal monetary policy via moment inequalities

The specification of an optimizing model of the monetary transmission mechanism requires selecting a policy regime: commonly, commitment or discretion. In this paper we propose a new procedure for testing optimal monetary policy, relying on moment inequalities that nest commitment and discretion as two special cases. The approach is based on the derivation of bounds for inflation that are consistent with optimal policy under either policy regime. We derive testable implications that allow for specification tests and discrimination between the two alternative regimes. The proposed procedure is implemented to examine the conduct of monetary policy in the US economy.     

Debate: The dangers of fiscal illusion

Crime prevention emerged as a separate policy issue in the late 1970s, with rising crime rates, disillusionment with traditional crime control methods and evidence that situational methods could be effective. There have since then been changes in language and approach. Situational crime prevention no longer dominates. The language is of community safety and crime reduction. The focus is on fear of crime and incivilities, as well as crime. Crime and Disorder Reduction Partnerships now have statutory responsibilities at a local level. While in some ways the circumstances are auspicious for improved, evidence-based policy and practice, they face substantial obstacles.     

Managing unintentional dwelling fire risk

In this paper, we examine the management of unintentional dwelling fire risk through the development of a geographical information system (GIS) for dwelling fire prevention support based upon an 18-month case study in a UK fire and rescue service. Previous research into causal factors in unintentional dwelling fire incidents was used to guide the development of a multiple linear regression risk model for dwelling fire incidents that was the basis of the GIS developed. The GIS provided a more detailed analysis of unintentional dwelling fire risk factors, and enabled more targeted fire prevention activities for the identified at-risk social groups.     

Heterogeneous beliefs and optimal ownership in entrepreneurial financing decisions

Our setting comprises one entrepreneurial firm with a growth opportunity seeking for external funding from a venture capitalist, where the entrepreneur and venture capitalist have homogeneous or heterogeneous beliefs about its growth prospects. We developed a real options model to determine the optimal ownership structure that triggers the simultaneous exercise of the growth option on the entrepreneurial firm by entrepreneurs and venture capitalists. Our results show that the more optimistic any of the parties is, the lower the post-money firm ownership that party will retain. However, optimism leads parties to delay their decision to invest in the entrepreneurial firm, by demanding higher profit triggers and investing only in more valuable entrepreneurial firms. The combination of these two effects leaves perceived returns on investment unchanged and not dependent on their own optimism.     

Does tourism influence economic growth? A dynamic panel data approach

On average, tourism-specialized countries grow more than others. This is not consistent with the core of modern economic growth theory that suggests that economic growth is linked to sectors with high-tech intensity and large scale. In this article, we use appropriate panel data methods to study the relationship between tourism and economic growth. In general, we show that tourism is a positive determinant of economic growth both in a broad sample of countries and in a sample of poor countries. However, contrary to previous contributions, tourism is not more relevant in small countries than in a general sample.     

Profitability in Portuguese service industries: a panel data approach

Based on various panel models, we study the profitability determinants of Portuguese service industries. The results obtained show that profitability is persistent over time, and that for larger companies with greater growth, a lower level of debt and lower level of fixed assets are more profitable. Considering the results obtained, we can conclude that diversification of activities and motivation as well as the tendency to innovate contribute positively to increased profitability in Portuguese service industries, whereas the need to pay off debt charges periodically harms profitability. The government would be well advised to create special credit channels that would permit the greater growth of Portuguese service industries, especially those most inclined to innovate.     

The influence of age on SMEs’ growth determinants: empirical evidence

This paper seeks to investigate whether age is a fundamental characteristic of the relationships between determinants and growth. The empirical evidence obtained allows us to conclude that: (1) age and size are restrictive factors of the growth of young SMEs, but they are not important for the growth of old SMEs; (2) cash flow and debt are of greater relative importance for growth in young SMEs than for growth in old SMEs; (3) R&D intensity and labour productivity are of greater relative importance for growth in old SMEs than for growth in young SMEs; (4) interest on debt is of greater relative importance for diminished growth in young SMEs than for diminished growth in old SMEs; and (5) R&D intensity in situations of financial deficit is of greater relative importance for diminished growth in young SMEs than for diminished growth in old SMEs, but only in context of high-tech SMEs.