Portfolios in the Ibex 35 before and after the Global Financial Crisis

In this article, we present an analysis of the effectiveness of various portfolio optimization strategies applied to the stocks included in the Spanish Ibex 35 index, for a period of 14 years, from 2001 until 2014. The period under study includes episodes of volatility and instability in financial markets, incorporating the Global Financial Crisis and the European Sovereign Debt Crisis. This implies a challenge in portfolio optimization strategies since the methodologies are restricted to the assignment of positive weights. We have taken for asset allocation the daily returns with an estimation window equal to 1 year and we hold portfolio assets for another year. This article attempts to influence the discussion over whether the naive diversification proves to be an effective strategy as opposed to portfolio optimization models. For that, we evaluate the out-of-sample performance of 15 strategies for asset allocation in the Ibex 35, before and after of the Global Financial Crisis. Our results suggest that a large number of strategies outperform to the 1/N rule and to the Ibex 35 index in terms of return, Sharpe ratio and lower VaR and CVaR. The mean-variance portfolio of Markowitz with short-sale constraints is the only strategy that renders a Sharpe ratio statistically different from Ibex 35 index in the 2001–2007 and 2008–2014 time periods.     

Decomposing income inequality in a backward pre‐industrial economy: Old Castile (Spain) in the middle of the eighteenth century

Research on economic inequality in early modern Europe is complicated by the lack of appropriate data for reconstructing income or wealth distributions. This article presents a study of income inequality in mid‐eighteenth‐century Old Castile (Spain) using the Ensenada Cadastre, a census conducted between 1749 and 1759. The article describes the information provided by this census and then discusses its advantages and disadvantages for reconstructing income profiles and calculating income inequality. This is followed by analysis of a dataset derived from the Cadastre that consists of more than 4,000 observations from Palencia (a province in northern Spain) and contains information on sources of household income, each household head's main occupation, residence location, and other household characteristics. Demographic data from this census is used to weight observations in the sample and thereby minimize selection bias. Findings show that inequality in eighteenth‐century Spain was probably substantial despite its relative backwardness; that the relationship between inequality and per capita income was not clear‐cut and was probably influenced by measurement of the higher incomes; and that although income inequality was largely driven by uneven land distribution, labour income also contributed to overall inequality—especially in urban centres.     

Decision support system to design feasible high-frequency Motorways of the Sea: A new perspective for public commitment

ABSTRACT

The implementation of Motorways of the Sea (MoS) within the framework of European Union aid programs experiences a period of relative stagnation. This article analyzes the suitability of current short-term nonrepayable subsidy policy and develops a decision support system (DSS) that allows a medium- and long-term feasibility analysis of MoS proposals. One significant conclusion drawn from the application of the proposed DSS to a prototypical high-frequency MoS provides that the period of initial losses prior to achievement of both modal shift and accounting profits might last 10 years. Moreover, the entire duration of the period that includes prior objectives as well as the recovering of initial losses might reach 25 years. Therefore, existing schemes of public–private collaboration should be redefined. To this end, the proposed DSS also contributes to envisioning a spectrum of possibilities for private–public collaborations schemes, as opposed to public–private dichotomy of partnerships.     

The Transmission of Sustained Growth through the Terms of Trade in an Endogenous Growth Model

This paper develops a two‐country model of endogenous growth and international trade in intermediate goods. In autarky just one of the economies enjoys sustained growth. The trade situation may be characterized by complete specialization of both countries, or by incomplete specialization of the growing economy. In either case, trade transmits perpetual growth to the stagnant economy because of the permanent improvements in its terms of trade. The existence of a non‐reproducible factor in the growing economy is crucial to ensure propagation of growth. Moreover, under incomplete specialization countries converge in per capita income. This result relies on two assumptions. First, there must be a large enough share of world income to pay for the input in which the stagnant economy has comparative advantage. Second, all technologies producing intermediate goods should be equally intensive in the non‐reproducible factor.     

A Tale of two narratives: assessing the sociological hypothesis of the appeal of the US dollar in Argentina

Quality & Quantity - A remarkable feature of the Argentinean economy is the widespread use of the US dollar as a measure of value, storage of value and in several high-end markets, as a medium...     

The Scenario of Lean Product Development in Brazilian Auto-industry

The purpose of this paper is to evaluate the impact of lean product development （LPD） in the Brazilian automotive sector. A mailed-questionnaire survey was used to examine 23 questions about LPD principles and practices. The target population for the study was Brazil＇s largest product development and design companies. The study identified that although the automobile sector is seen as a reference in the adoption of lean practices, there is still potential for improvement by establishing partnership relations with suppliers, and with those on the other points of the chain by identifying what provides value to clients. Set-based concurrent engineering is also a practice that needs to be better developed, as well as the value stream mapping tool to identify waste and activities that add value to the product development process. There has been no previous study of this nature in Brazil that characterizes the sector and highlights its importance in relation to the global scene, providing incentives to international investors. The value of the work is in the results that allow diagnosing the lean development practices that are most used in the automotive sector. Moreover, the survey questions can be applied in other economic sectors and at companies of other sizes. The study contributed to providing a systematic view of the product development process from the perspective of people, processes, and technology, and assists companies and academics manage change.     

Adapting leadership theory and practice for the networked,millennial generation

Current research offers a complex perspective on the main characteristics of Millennials (or Gen‐Ys, as they are also called) as a generation in which knowledge is acquired, shared, and created as an extension of the primacy of relationships and networks and embedded in the connections that information technology provides. Aspects of the servant‐leadership model provide a context from which to examine the construction of workplace practice (action) and purpose (meaning) among members of the Millennial generation. However, theories developed in previous generations are not automatically applicable and require critical examination and adaptation if they are to offer an understanding of means for motivating and influencing Millennials toward more broadly defined goals and aspirations in multigenerational workplaces. After a review of recent literature, we conclude that future organizational paradigms will have to develop a multigenerational collaborative culture. With this in mind, we discuss how service leadership contributes to these new networked and collaborative organizations to help Millennials flourish and prepare them for leadership positions as well.     

The value of entrepreneurship by gender on regional behaviour

This paper examines how the value of entrepreneurship by gender is related to regional behaviour. Researchers have traditionally defined entrepreneurial organization as separate to gender and to economic growth. Using the Global Entrepreneurship Monitor (GEM) we complete a dataset of 50 countries using variables such as total early-stage entrepreneurial activity (TEA) and opportunity-driven entrepreneurial activity (OPP). The methodology used proposes an analysis of regional convergence, comparing the evolution over time of both the rate of entrepreneurial activity and the ratios of opportunity-driven and need-driven entrepreneurial activity, distinguishing by gender. On the other hand, a regression model is proposed that explains the greater presence of female entrepreneurship. The results show that entrepreneurship by gender is an important factor to define different cluster of countries according to how men and women entrepreneurs create new economic opportunities.

     

Community banks' capital requirements and regional housing tenure

Bank capital requirements aim at reducing the likelihood of banks' failure. However, these policies may generate externalities on the overall economy. By investigating the pathways from capital requirements to housing tenure using structural equation modelling, we show that community banks' capital requirements increase the gap between the regional real estate loans-based and non-real estate loans-based housing purchase rate and act as driving factors of housing market imbalance. The drop in residential real estate loans caused by the increase in capital requirements has two opposite effects: the direct effect motivates residents to rent properties, while the indirect effect motivates residents to purchase them due to the fall in housing prices. When both effects exist in housing purchases with real estate loans, the former effect is more influential than the latter one. Our findings suggest that the impact of capital requirements on housing tenure will depend on residents' reliance on real estate loans. If a housing purchase requires real estate loans, capital requirements will have a negative impact on the housing purchase, and vice versa.     

NO CREDIT,NO GAIN: TRADE LIBERALIZATION DYNAMICS,PRODUCTION INPUTS,AND FINANCIAL DEVELOPMENT

We study the role of financial development on the aggregate implications of reducing import tariffs on capital and intermediate inputs. We document empirically that financially underdeveloped economies feature a slower aggregate response following trade liberalization. To quantify these effects, we set up a general equilibrium model with heterogeneous firms subject to collateral constraints and estimate it using Colombian plant-level data. We find that low financial development substantially limited the gains from trade liberalization in Colombia in the early 1990s. More broadly, we find that low financial development substantially limits both the aggregate and welfare gains from tariff reductions.