Fiscal multipliers in the Eurozone: an SVAR analysis

We compute the value of fiscal multipliers (for government primary expenditure, Income and wealth taxes and for Production and import taxes) in the Eurozone countries since the creation of the currency union (2000Q1-2016Q4), in order to understand how the values can vary according to the public debt level, the pace of economic growth, and the output gap. Imposing quarterly fiscal shocks, the results showed that government expenditure had a positive effect on output, with an annual accumulated multiplier of 0.44, whereas tax multipliers presented negative signs: the Income and wealth and the Production and import taxes stood at ?0.11 and ?0.55, respectively. Furthermore, the spending multiplier showed a higher value for countries with lower levels of public debt, during recessions, and in countries with negative output gaps. On the other hand, tax shocks seemed to be recessive in highly indebted countries and those facing positive output gaps.     

Limits to Arbitrage and Value Investing: Evidence From Brazil

ABSTRACT

In this article we show that the results obtained by accounting-based fundamental analysis strategies observed in the US market cannot be directly extended to emerging markets with less developed institutional environments and narrow equity markets as found in Latin America. We use Brazil as a special case and through standard tests show the apparent usefulness of financial statement analysis as an effective investment tool. We show that an investor could have changed his/her high book-to-market (HBM) portfolio one-year (two years) market-adjusted returns from 5.7% (42.4%) to 26.7% (120.2%) by selecting financially strong HBM firms listed on the São Paulo Stock Exchange. Our tests were performed using stock returns from 1995 to 2007 and financial and accounting data from 1994 to 2004. When one considers low book-to-market (LBM) firms, the results of the study indicate that an investor could change his/her mean (median) one-year market adjusted return from ?11.9% (?7.4%) to 8.1% (2.5%) by adopting the strategy proposed. However, additional investigation demonstrates that the returns generated by these strategies are significantly dependent on stock's liquidity, and when we consider only stocks where arbitrage is possible, the previous results do not hold. These findings contribute to the literature that tries to address the impact of limits to arbitrage on some well reported capital markets phenomena related to financial reporting.     

Myopic Loss Aversion in Brazilian Open Retirement Funds

ABSTRACT

This paper analyzes the relationship between withdrawals from Brazilian open retirement funds, portfolio composition (fixed income or equity) and frequency of statement sending (monthly, quarterly, semiannually or annually). Our results indicate that equity retirement plans present a lower withdrawal index when compared to that of fixed income plans. Furthermore, the higher the statement sending frequency, the lower the withdrawals from open retirement plans. However, withdrawals from equity retirement plans tend to increase when statements are sent to investors more frequently. These phenomena can be explained by behaviorist theories, such as the concept of myopic loss aversion. In a context where loss aversion is present, the more frequently the investor evaluates his or her portfolio, or the shorter the investment horizon, the less attractive he or she will find investment in assets with a high rate of return and risk, such as equities. This behavior occurs not only regarding short-term investments, but also traditional long-term assets such as equity retirement plans.

RESUMEN. Este estudio analiza la relación existente entre las retiradas de los fondos abiertos de jubilación brasileños, la composición de la cartera (ingreso fijo o patrimonio), y la frecuencia del envío de estados financieros (mensual, trimestral, semestral o anualmente). Nuestros resultados indican que los planes de jubilación patrimonial tienen un índice de retirada menor, en comparación con los planes de ingreso fijo. Además, cuanto mayor la frecuencia de los estados financieros, menor es la retirada de los planes abiertos de jubilación. Sin embargo, las retiradas de los planes de jubilación patrimoniales tienden a aumentar cuando los estados se envían a los inversores con más frecuencia. Este fenómeno puede explicarse con las teorías comportamentales, tales como el concepto de la aversión miope a la pérdida. En un contexto donde la aversión a la pérdida es una realidad, cuanto mayor la frecuencia con que el inversor pueda evaluar su carera, o menor el horizonte de inversión, menos atractivas considerará él las inversiones en activos con un alto retorno y riesgo, tal como las acciones. Este comportamiento ocurre no sólo en las inversiones a corto plazo, sino también en los activos a largo plazo, como los planes de jubilación patrimoniales.

RESUMO. Este artigo analisa a relação entre as retiradas dos fundos abertos de aposentadoria brasileiros, a composição da carteira (renda fixa ou ações) e a freqüência da remessa de extratos (mensal, trimestral ou semestral). Nossos resultados indicam que os planos de aposentadoria que aplicam em ações apresentam um índice de retirada menor em comparação com os planos de renda fixa. Além disso, quanto maior a freqüência de remessa de extratos, menores as retiradas dos planos abertos de aposentadoria. Entretanto, as retiradas dos planos de aposentadoria que aplicam em ações tendem a aumentar quando o extrato é enviado aos investidores commais freqüência. Esses fenômenos podem ser explicados por teorias behavioristas, como o conceito de aversão míope à perda. Num contexto onde a aversão à perda esteja presente, quanto maior a freqüência com que o investidor avalia a sua carteira, ou quanto menor o horizonte do investimento, menos atraente ele achará o investimento em ativos com alto retorno e risco, como ações. Esse comportamento ocorre não apenas em investimentos a curto prazo, mas também nos ativos tradicionais de longo prazo como os planos de aposentadoria com aplicação em ações.     

The Innovation Process and the Development of a Sustainability Strategy

ABSTRACT

This article analyzes what influences a firm's choice of strategy—why some firms stick to defensive strategies while others rely on offensive ones. With this in mind a survey was conducted on mineral sector companies associated with the Brazilian Mining Institute. The results show that the majority of companies use an offensive strategy and that some companies use more than one strategy at the same time. That is, they possess a corporate strategy and a sustainability strategy.     

Online value creation in small service businesses: the importance of experience valence and personal values

Perceived value is of great interest in current marketing research. However, in the area of Internet as a shopping channel of small businesses, there has been little analysis of customer perceived value and its determinants. This paper examines two little analysed aspects of value creation, experience valence and personal values. The analysis of data from a survey of tourism service purchase shows that experience valence, in terms of relevant information, ease of use and customer service, clearly influences perceived value after the online shopping experience. In contrast, only personal values of sense of security and sense of accomplishment influence perceived value.     

Are there nonlinear relationships between the profitability of Portuguese service SME and its specific determinants?

Using quantile regressions, this paper examines the possibility of significant nonlinear relationships between the profitability of Portuguese service small- and medium-sized enterprises (SMEs) and its specific determinants. The results lead to the conclusion that there is a significant nonlinearity between specific determinants and profitability in Portuguese service SMEs. In the lower quantiles of the distribution of profitability of Portuguese SMEs, it is found that profitability on the one hand is catalysed by size, long-term debt and managerial control, and on the other hand, it is restricted by risk and research and development intensity. In the upper quantiles of the profitability distribution of Portuguese service SMEs, liquidity and research and development intensity serve as catalysers of profitability, while long-term debt restricts the level of profitability.     

Taxes and labor supply: Portugal, Europe, and the United States

I relate hours worked with taxes on consumption and labor for Portugal, France, Spain, United Kingdom and United States. From 1986 to 2001, hours per worker in Portugal decreased from 35.1 to 32.6. With the parameters for Portugal, the model predicts hours worked in 2001 with an error of only 12 min from the actual hours. Across countries, most predictions differ from the data by 1 h or less. The model is not sensible to special assumptions on the parameters. I calculate the long run effects of taxes on consumption, hours, capital and welfare for Portugal. I extend the model to discuss implications for Social Security. I discuss the steady state and the transition from a pay-as-you-go to a fully funded system.

From disruptions to struggles: Theorizing power in ERP implementation projects

Enterprise resource planning (ERP) implementation projects often fail to achieve their objectives. These often problematic projects are frequently the setting for intense and growing power struggles. Existing studies (e.g., Boonstra, 2006; Shepherd, Clegg, & Stride, 2009) have provided researchers with insights about issues of power in these projects. However, existing research has yet to provide a comprehensive picture of power in these projects or insights on how this picture changes with the passage of time. Clegg's (1989) circuits of power framework provides a useful tool for developing this needed comprehensive picture. We use the circuits of power framework as a tool for categorizing existing literature on power in ERP implementations. More importantly, we draw on this framework to provide a comprehensive view of power in the particular context of these projects. Specifically, we analyze the power relations during the implementation of an ERP in an organization. We do so by identifying how disturbances to the circuits of power – power struggles – arise and intensify during the implementation of the ERP. In this way, our work makes both a theoretical and an empirical contribution to the study of power in ERP implementation projects.     

Institutional Change of Accounting Systems: The Adoption of a Regime of Adapted International Financial Reporting Standards

Richard Mattessich, New York: Garland Publishing (New Works in Accounting History), 2000, £43.00, xii +179pp. ISBN: 0-8153-3445-1     

Labor productivity and vocational training: evidence from Europe

In this paper we show that vocational training is an important determinant of productivity growth. We construct a multy-country, multi-sectoral dataset, and quantify empirically to what extent vocational training has contributed to increase the growth rate of labor productivity in Europe between 1999 and 2005. We find that one extra hour of training per employee accelerates the rate of productivity growth by around 0.55 % points.