Investigating the solvency of brazilian credit unions using a proportional hazard model

Abstract ** : Due to high interest rates and bank spreads, the number of credit unions in Brazil has increased over recent years. As financial institutions, these cooperatives need tools to signal impending financial problems. This paper focuses on one tool that can be used to evaluate credit union solvency: the Cox Proportional Hazards Model. A sample of 80 credit unions from the Brazilian state of Minas Gerais was selected to supply data. The analysis period is between December 2001 and June 2003. The results indicate that the relevant indicators for insolvency prediction are, in descending order of predictive ability, General Liquidity, Salary and Benefit Expenses, and the Loan/Equity Ratio. In general, results produced using the delineated theoretical model were in consonance with international literature .     

Estimating the social cost of pesticide use: An assessment from acute poisoning in Brazil

The intensive use of pesticides in countries like Brazil has ignored structural and institutional shortfalls, such as the lack of workforce training for the new, difficult to implement technologies, and the institutional vulnerability of the environmental protection, health, and safety sectors. As a result we have “invisible” or social, environmental and health costs which end up being socialised with the farmer, in general, having no incentives to recognise and internalise them. This study is intended to review and develop this problem in the light of the Brazilian reality. To this end, we make use of an empirical exercise to illustrate estimation of the social cost associated with acute poisoning by pesticide using the PREVS/IBGE data (Harvest Forecast Research) in the state of Paraná, Brazil. The results suggest that, for maize, the costs of acute poisoning could represent 64% of the benefits of using herbicides and insecticides, and, in the best of hypotheses, when some risk factors are eliminated, they may reach 8% of the benefits of the use of these products. Similarly, when we examine future scenarios for five and ten years, we find less encouraging results, as in ten years the costs of acute poisoning could reach around 85% of the benefit of using insecticides and herbicides for maize. However, there is the encouraging news that, if preventive measures were taken during this time, the gains would be considerable, about 6.5 times greater. We conclude that an assessment of the real benefits involved with pesticides in Brazil is required, principally in regard to the smallholder, where farmers need more training in the use — or even the elimination — of these hazardous substances. There are sustainable technological options available which are economically efficient, especially if we consider the social, environmental and health costs. In this context it is worth highlighting the role of regulatory measures as a mechanism which can reorient generation of negative external costs through the reduction of current incentives in the socialisation of private costs.     

Determinants of hierarchical structure in industrial firms: an empirical study

The paper investigates implications of different theoretical models for hierarchical structure. A sample of 6,578 firms in the Brazilian manufacturing industry is considered and explanatory factors pertaining to structural characteristics, network technology, technological innovations, managerial innovations and incentive mechanisms are investigated. Important joint effects are detected for all groups of variables in partial contrast with the related previous literature. Moreover, one detects significant joint effect of the newly considered group of incentive variables. The evidence in terms of individual effects is largely consistent with the predicted effects from the theoretical literature.     

Environmental Analysis of Packaging for Soft Drinks Using the Life Cycle Assessment Methodology

The knowledge of a product＇s life cycle is the first step on the search of sustainable development. The life cycle assessment （LCA） is an important method because it allows an environment accounting, where the extraction of natural resources and energy of the nature are considered and the ＂returns＂ to the same one and allows in evaluating relative potential the environment impacts generated. The present work had as objective to make an analysis of material and energy flows of the life cycle of three types of packaging for soft drinks： glass bottles of 390 mL, aluminum cans of 350 mL, and bottles of PET of 2,000 mL. The study considered processes since the extraction of raw materials for production of the packaging until the stages of recycling, after the consumption of the soft drink. For the research, an inventory analysis followed the LCA methodology. The main critical points of generation of negative environmental impact during the life cycle of each packaging had been the identified and quantified data in this study. The consumption of natural resources like water and other raw materials and energy, the generation of atmospheric emissions, solid wastes and wastewaters had been the analyzed categories. The results showed that, in accordance with the scenes and defined variables, the most important conclusion was that the bottle of glass presented a less favorable scene to the environment in comparison with other packaging.     

FIRING COSTS AND BUSINESS CYCLE FLUCTUATIONS*

This article considers a real business cycle model with establishment level dynamics and uses it to analyze the effects of firing taxes. It finds that firing taxes can have significant consequences on business cycle fluctuations, that the largest effects are on aggregate employment, and that even relatively small firing taxes have substantial effects. A significant contribution of the article is computational: It describes how to use standard linear‐quadratic methods to solve for a stochastic equilibrium of an (S,s) economy with tax distortions.     

Does corporate international diversification destroy value? Evidence from cross-border mergers and acquisitions

This paper investigates the valuation effects of corporate international diversification by examining cross-border mergers and acquisitions of US acquirers over the period 1990–2000. We find that, on average, acquisitions of “fairly valued” foreign business units do not lead to value discounts. In contrast, unrelated cross-border acquisitions result in a significant diversification discount of about 24% after accounting for the valuation of foreign targets. Furthermore, significant wealth gains accrue to foreign target shareholders regardless of the type of acquisition. Overall, our results suggest that international diversification does not destroy value while industrial diversification leads to discounts even after controlling for the pre-acquisition value of the target.     

Pro-poor trade policy in Sub-Saharan Africa

This paper examines the presence of a pro-poor bias in the existing structure of protection of six Sub-Saharan African (SSA) countries, Burkina Faso, Cameroon, Côte d'Ivoire, Ethiopia, Gambia, and Madagascar. We build on a simple agricultural household production model and we propose an extension to include adjustments in labor income. Our approach, which can be implemented without repeated cross-sections of household level data, suits well the data constraints in SSA. It also allows us to capture the heterogeneity in trade protection at the tariff line level. The pro-poor bias indicators suggest that SSA's trade policies tend to be biased in favor of poor households, as these policies redistribute income from rich to poor households. This is because protection increases the agricultural prices of goods that are sold by African households and this effect dominates both the impacts of higher consumption prices and the strong Stolper–Samuelson effects that benefit skilled over unskilled workers.     

The service sector of Cuba: An analysis and critique

The Cuban economy has experienced a significant increase in foreign direct investment over the past decade due to the end of the Soviet Union and the establishment of more liberal trade policies. Although the U.S. embargo of trade with Cuba still exists, there has been movement lately that suggests the end of the four‐decades‐old policy. The purpose of this article is to analyze the current Cuban business environment and to identify potential entrepreneurial opportunities in the service sector. Major trade partners are also reviewed and managerial implications discussed. © 2006 Wiley Periodicals, Inc.     

Jorma Ahvenainen. The European Cable Companies in South America before the First World War. Helsinki, Finland: Academia Scientiarum Fennica, 2004. 427 pp. ISBN 951-41-0947-3, X35.00.

After the wars of independence in the first half of the nineteenthcentury, Latin American countries embarked on a process of insertioninto the world economy, opening their doors to foreign investmentand specializing in the exportation of raw materials. In freemarkets and in an alignment with the British imperial economicsystem, Latin American elites saw a road for economic prosperityand political stability. Between the 1880s and 1914, Latin Americabecame more integrated into the     

Attitudinal loyalty and trust in entrepreneurship: building new relationships

This paper studies the impact of attitudinal loyalty and trust in entrepreneurship, following a client-focused strategy. In this context, trust and commitment are the cornerstone of relationship marketing, and contributes positively to achieving attitudinal loyalty, which is suitable for the maintenance of relationships over time. This variable also acts as a facilitator or mediator on the influence satisfaction has on loyalty. We show that satisfaction has a positive impact on trust and attitudinal loyalty. Following structural equation modelling methodology we test all the relationships in a sample composed by travel agency customers.