Pricing corporate bonds in Brazil: 2000 to 2004

This paper analyzes the factors that influence the issuing price of debentures in Brazil in the period from year 2000 to 2004, applying a factor model, in which exogenous variables explain return and price behavior. The variables in this study include: rating, choice of index, maturity, country risk, basic interest rate, long-term and short-term rate spread, the stock market index, and the foreign exchange rate. Results indicate that the index variable, probability of default and bond's maturity influence pricing and points out associations of long-term bonds with better rating issues.     

Why So Small? Explaining the Size of Firms in Latin America

On average, Latin American firms are small with respect to world patterns, both in terms of the quantity of assets they control and the amount of employment they generate. We examine data on firm size from developed and developing countries around the world to assess the influence of demand, supply and institutional factors on the size of the largest firms in each country. We find that, besides the size of the economy and the level of income per capita, the key determinants of the size of firms are trade openness, stock market capitalisation and physical infrastructure. Our simulations suggest that if the gaps with respect to the best Latin American performer were closed in each of these three areas, firm size in the countries of the region would – on average – reach world patterns.     

Financial liberalization, structural change, and real exchange rate appreciations

The last twenty years have witnessed periods of sustained appreciations of the real exchange rate in emerging economies. The case of Mexico between 1988 and 2002 is representative of several episodes in Latin America and Central and Eastern Europe in which countries opening to capital flows experienced large appreciations accompanied by a significant reallocation of workers towards the non-tradable sector. We account for these facts using a two sector dynamic general equilibrium model of a small open economy with frictions to labor reallocation and two driving forces: (i) A decline in the cost of borrowing in foreign markets, and (ii) differential productivity growth across sectors. These two mechanisms account together for 60% of the decline in the domestic relative price of tradables in Mexico and for a large fraction of the observed reallocation of labor across sectors. The decline in the interest rate faced by Mexico in international markets is quantitatively the most important channel. Our results are robust to the inclusion of terms of trade into the model.     

Economic performance in Latin America in the 2000s: recession,recovery, and resilience?

This paper examines Latin America’s economic performance in the last three decades with the objective of assessing whether it entered a new phase of strong and persistent growth with stabilization in the 2000s. Our analysis pays special attention to the changing roles of exports and investment as drivers of growth and to the region’s performance in the fiscal area, the composition and dynamics of foreign trade, investment and labour productivity. Our results indicate that, in general, the region has achieved important progress in macroeconomic matters, but it has failed to overcome major structural, long-term constraints linked to its balance of payments and to a lesser extent its fiscal performance. Unless these challenges are resolved, the region’s long-term growth will hardly be favourable.     

Family firms and financial performance: The cost of growing

This study examines the relationship between financial performance and family involvement for 523 listed and non-listed Colombian firms over 1996–2006. Using a detailed database and performing several panel data regression models, we find that family firms exhibit better financial performance on average than non-family firms when the founder is still involved in operations, although this effect decreases with firm size. With heirs in charge, there is no statistical difference in financial performance. Both direct and indirect ownership (control through pyramidal ownership structures within family business groups) affect firms' financial performance positively. However, this positive effect decreases with firm size. The results suggest that some kinds of family involvement appear to make firm growth expensive.     

Small versus large retail stores in an emerging market—Mexico

As emerging markets open, they attract large domestic and international retailers, which compete with traditional local small stores. This study investigates whether this influx of large stores is inevitable, by focusing on consumers' motivation for selecting a retail store, and the association between these motivation dimensions and the shopping patronage. The results from an empirical study conducted in Mexico indicate that consumer's preference for small stores is positively motivated by functional benefits and familiarity with small stores; and negatively associated with the functional benefits offered by large stores. These motivational dimensions are also positively associated with the share of wallet spent at small stores. While gender exhibits mixed effect on preference for small stores and the share of wallet, women do feel that large stores provide better functional benefits and support for the local economy. Finally, the study details the research and managerial implications of the findings.     

The complex reality of biodiversity conservation through Natural Protected Area policy: Three cases from the Yucatan Peninsula,Mexico

The federal policy of Natural Protected Areas has become the main instrument for conserving biodiversity in Mexico. Established in territories representative of different ecosystems but also of cultural diversity, protected areas in Mexico have historically been created and managed with a centralized rationale, creating several conflicts with local communities over the use of natural resources. The country's approach to protected areas perfectly illustrates the complexities, difficulties and challenges entailed in biodiversity conservation. This paper develops a critical analysis of this policy instrument in Mexico, and analyzes three Natural Protected Areas in the Yucatan Peninsula: The Calakmul Biosphere Reserve, the Celestún Biosphere Reserve, and the Otoch Ma’ax Yetel Kooh Natural Protected Area. The case studies serve as examples of the most common difficulties that arise in Mexican Natural Protected Area policy: (1) uncoordinated public policies; (2) the usual conflict between environmental authorities and local people over the management of natural resources; and (3) the exclusion of local people's perspectives, values and beliefs in conservation policy development and implementation.     

Estimation of Area Elasticities from a Standard Profit Function

This article demonstrates that both crop area and output elasticities can be calculated from a profit function. A Chambers/Just profit function (which includes land allocations as quasi-fixed factors) is used to derive shadow price equations for each crop area allocation. Jointly solving these shadow price equations for crop area makes it possible to calculate individual crop area elasticities. A profit function is specified to represent agricultural producers in the state of Iowa. Shadow price equations are jointly estimated with output supply and input demand equations. From these estimated equations, we derive the individual crop area response and output response to a change in prices.     

The Effect of Extrinsic Product Attributes of Pineapple Juice on Consumer Intention to Purchase

This study aimed to investigate the extent to which consumer information concerning several attributes of the pineapple juice packaging, including the manufacturing process, influenced the consumer intention to purchase. It is suggested that high-pressure technology retains nutrients as vitamins and keeps sensory attributes closer to those of fresh foods. These advantages meet the increasing consumer demand for healthy products and a more differentiated food assortment. However, the benefits provided by these products are not always communicated to consumers. Although information about the technology (high-pressure) had been positively considered by consumers when fruit juice consumption was taken into account, fewer studies have focused on this aspect. The effect of 5 attributes of the package (information on manufacturing process, product definition, production information, price, and brand name) on the pineapple juice consumer intention to purchase was investigated by 96 fruit juice consumers. Information about technology (high-pressure) positively contributed to the consumer pineapple juice intention to purchase and showed to be essential when it is applied on pineapple juice production, being a useful approach when adequately communicated to consumers.