Exploiting short-run predictability

This paper measures the utility gains from exploiting short-run predictability in the volatility of stock returns in a dynamic model in the the presence of transaction costs, short-selling constraints and estimation risk. We find that utility gains are quite significant, both ex ante and out-of-sample.     

Dividend reinvestment plans: An empirical analysis

This study examines the effect of initiating discount and no discount dividend reinvestment plans on shareholder wealth. The results show a negative response to DRP announcements, which is significantly smaller than that found in studies of new equity offerings. These results are consistent with the Scholes and Wolfson (1989) hypothesis that managers in need of equity capital use DRPs to mitigate the adverse stock price effects of new equity issue announcements. Furthermore, there is a significant difference in the price response of discount and no discount DRPs for industrial firms. This result is supportive of the signaling potential of discount DRPs. Supportive evidence is also found in the analysis of firm characteristics for industrial firms.     

Critical thinking and communication skills: Integration and implementation issues

This article describes issues associated with implementing an integrated approach to critical thinking and communication skills within accounting courses. The article builds on the work of Hirsch and Collins (1988) and discusses the following issues: (a) the collaboration of accounting and English faculty, (b) types of assignments, (c) assignment design, (d) the feedback process, (e) revisions in courses to accommodate a communication skills program, and (f) resources and motivation. The examples offered are from management/cost accounting courses, but our experience suggests that such an integrated approach to teaching critical thinking and both oral and written communication skills works well within most accounting and other business courses. However, individual programs will need to be tailored in order to address the issues defined here in ways that best fit their mission, goals, and resources.     

Commodity Prices and the Business Cycle in Latin America: Living and Dying by Commodities?

We analyze the dynamic interactions between commodity prices and output growth of the seven biggest Latin American exporters: Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela. Using a novel definition of Markov-switching impulse response functions, we find that the response of each country's output growth to commodity price shocks is time dependent, size dependent, and sign dependent. The major evidence of asymmetries in output growth responses occurs when commodity price shocks lead to regime shifts. Thus, we conclude that the design of optimal countercyclical stabilization policies should consider that the reactions of economic activity vary considerably across business cycle regimes.     

The exit decision in the European venture capital market

This article analyses the exit decision in the European venture capital market, studying when to exit and how it interacts with the exit form. Using a competing risks model we study the impact on the exit decision of the characteristics of venture capital investors, of their investments and of contracting variables. Our results reveals that the hazard functions are non-monotonic for all exit forms and suggest that, in Europe, Initial Public Offering candidates take longer to be selected than trade sales. Moreover our results show that, in Europe, venture capitalists associated with financial institutions have quicker exits (stronger for trade sales), and highlight the importance of contracting variables on the exit decision. An unexpected result is that the presence on the board of directors leads to longer investment durations.     

Characteristics of Portuguese public‐sector project managers: Toward closing the effectiveness gap

Using a sample of 102 Portuguese public‐sector officials with project management experience, this study examines the characteristics of effective project managers in the Portuguese public sector. Factor‐analysis procedures are used to identify the factors related to areas of knowledge relevant to effective project management. The results appear to stress the increasing importance of people, organizational, and leadership skills in the effective management of today's complex and dynamic projects.     

Dominating estimators for minimum-variance portfolios

In this paper, we derive two shrinkage estimators for minimum-variance portfolios that dominate the traditional estimator with respect to the out-of-sample variance of the portfolio return. The presented results hold for any number of assets d≥4$d\ge 4$ and number of observations n≥d+2$n\ge d+2$. The small-sample properties of the shrinkage estimators as well as their large-sample properties for fixed d$d$ but n→∞$n\to \infty$ and n,d→∞$n,d\to \infty$ but n/d→q≤∞$n/d\to q\le \infty$ are investigated. Furthermore, we present a small-sample test for the question of whether it is better to completely ignore time series information in favor of naive diversification.     

Dealing with Donald Trump

The logic for multilateral cooperation in trade and beyond becomes stronger, not weaker. A new governance forum will emerge, where negotiating will take place in country clubs instead of among members at the WTO.However, by breaking protocol, the US president has gained substantial bargaining power, because he puts himself in a situation in which he actually has to implement his threats if the negotiation counterparts do not confirm in order to save face on the domestic and global stages.     

The ‘disguised’ foreign investor: Brands,trademarks and the British expatriate entrepreneur in Brazil

Abstract

This article examines the impact of the British expatriate entrepreneur, and his processes of knowledge transfer, on the industrialization and economic development of Brazil between 1875 and 1914. It focuses on the textiles industry, and combines original trademark data with conventional trade and investment statistics, and also case study analysis about firms and their entrepreneurs. It argues that British investment in Brazil was higher and had a deeper impact on economic development than considered by existing research, as expatriate entrepreneurs ‘disguised’ a substantial amount of foreign investments by acting as shareholders and top managers of newly established local businesses.