Competition and diversification in public and private higher education

The development of mass higher education and growing competition between higher education institutions has given increasing visibility to the issue of diversification. This article analyses the issue of programme diversification, using a panel of 181 Portuguese higher education institutions over the period 1995 to 2007, by comparing the behaviour of public and private institutions. The results show that the legal status of institutions is the major determinant of programme diversification, as private institutions are far more specialized than their public counterparts. The study also evaluates the role of other institutional variables, such as the institution’s size, age, location, institutional mission and research intensity, to explain differences in the diversification behaviour of higher education institutions. The results provide important insights, as competition has been thought to improve the performance of higher education institutions.     

Characteristics of Innovative Firms in the Brazilian Computer Industry

A number of studies have reported characteristics of innovative firms; however, these studies have typically been conducted in freely competitive markets. Angela da Rocha, Carl Christensen and Newton Paim have studied firms within the Brazilian computer industry. The Brazilian government regulates the entrance of foreign competitors to this market. Thus, the authors are able to ask whether the characteristics of innovative firms in a protected market differ from characteristics previously reported in competitive markets. With only a few minor exceptions, the reported profiles of innovative firms are quite similar. These results suggest that characteristics of innovative firms are generalizable across certain industry and environmental conditions, including protected markets.     

LOCATION OF VERTICALLY LINKED OLIGOPOLISTS

This paper examines the geographical equilibrium of location of N vertically linked firms and its relation to the creation of an industrial cluster. In a two-region spatial economy, a monopolist firm supplies an input to N consumer goods firms that compete in quantities. When the transport cost of the input increases, downstream firms prefer to agglomerate where the upstream firm is located, to save in production cost. However, simultaneous increases in the transport cost of the input and of the consumer good or increases in the number of downstream firms lead to a relative dispersion of these firms, to reduce competition and locate closer to the local final consumer. In contrast to Mayer (2000) , when both transport costs increase, the location decision of downstream firms is based more on the geographical point that maximizes accessibility to the local final consumer than on the geographical point that minimizes the production cost.     

Government investment and the stock market

High rates of government investment in public sector capital forecast high risk premiums both at the aggregate and firm-level. This result is in sharp contrast with the well-documented negative relationship between the private sector investment rate and risk premiums. To explain the empirical findings, we extend the neoclassical q-theory model of investment and specify public sector capital as an additional input in the firm's technology. We show that the model can quantitatively replicate the empirical facts with reasonable parameter values if public sector capital increases the marginal productivity of private inputs.     

The Role of Financial,Macroeconomic, and Non-financial Information in Bank Loan Default Timing Prediction

We assess the use of bank loan information in predicting the timing to default. We use unique data on defaults in small and medium enterprises maintained by the Central Bank of Portugal which includes financial accounting and macroeconomic indicators, as well as non-financial information. The findings are indicative of the incremental predictive ability of non-financial information over and above macroeconomic and financial accounting information in the baseline, industry, and in- and out-of-sample models. Specifically, total credit secured by firms is, as expected, negatively and significantly related to default. Gross domestic product is negatively and significantly related to default, and benchmark market rate is positively and significantly associated with default. The findings also reveal that firms which are operated by partners, which have stronger financial support from partners, and which possess operational assets exhibit lower hazards of default. The study indicates that non-financial information and macroeconomic indicators assessed alongside financial accounting data can significantly improve the forecasting performance of default models.     

Leblon Cachaça: A born global in a traditional industry

This case describes the trajectory of Leblon, a cachaça producer that since its inception regards the world as a market for its product. Founded by entrepreneurs in 2005, the firm's production process is divided between Brazil and France, and it serves several world markets besides the U.S. and Brazil. The company is a truly born global, and the most striking feature of the firm's strategy is super premium positioning. The case was developed based on interviews with the CEO and the head of operations, complemented by secondary information. The case is suitable for use in graduate courses that address issues relating to born globals, international entrepreneurship, and international marketing.     

OUTPUT CONTINGENT SECURITIES AND EFFICIENT INVESTMENT BY FIRMS

We analyze competitive economies with risky investments. Unlike the classic Arrow–Debreu framing, firms and agents cannot contract upon the exogenous states underlying production risks. They can trade equities and any security written on the endogenous aggregate output. This financial structure is rich enough to promote efficient risk sharing among consumers. However, markets are incomplete from the production perspective, and the absence of prices for each primitive state of nature raises the question about the objective of firms. We show that output‐contingent asset prices convey sufficient information to compute the competitive shareholder value that leads to efficient investment by firms.     

The internationalization process of Brazilian software firms and the born global phenomenon: Examining firm,network, and entrepreneur variables

This paper examines the born-global phenomenon in the context of an emerging country, Brazil. A literature review was conducted in order to develop an integrative model of the phenomenon under study. Three sets of internal variables were identified in the literature which seemed to explain why a firm would follow a born global, rather than a traditional, internationalization process: firm, network, and entrepreneur variables. The final conceptual model was tested in a Brazilian sample of 79 software firms, of which 35 followed the born-global process of internationalization and 44 followed the traditional process. Logistic regression was used to test the research hypotheses. Results showed that certain firm and entrepreneur variables seemed to be associated to the type of internationalization process chosen by these firms. Network variables did not significantly differentiate the two groups.     

Real Exchange Rate and Economic Growth: New Empirical Evidence

The article empirically analyses the relationship between real exchange rate (RER) and growth rate of output. We first estimate the effect of the index of RER undervaluation on the rate of output growth in two samples of countries from 1978 to 2007. Our contribution is the use of a different dataset that increases the number of countries in the sample, as well as the number of available control variables. In doing so, the article adds to the literature by applying a method that allows for the control of income levels (quantile regressions). So, we present new findings on a non‐linear relationship the RER‐growth nexus. We conclude that maintaining a competitive level of RER has positive effects on growth rate.