Profitability and social impacts of reduced impact logging in the Tapajós National Forest, Brazil — A case study

Brazil contains the world's largest tropical rainforests, most located in the Amazon River Basin. Over the last three decades, rapid growth of this region's deforested area has had negative impacts. To minimize these impacts and maintain biodiversity, the Brazilian Government has established several national forests in the Basin. The ITTO Project, a reduced impact logging (RIL) operation, was recently carried out at one of these forests: the Tapajós National Forest, also known as Flona Tapajós. This paper evaluates the Project's profitability and its effect on local residents. The Project, which ran between 1999 and 2003, was coordinated by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA), with funding for planning and monitoring provided by the United Kingdom's Department of International Development (DFID) working through and approved by the International Tropical Timber Organization (ITTO). Treviso Agropecuária Ltda, a private logging company, carried out timber extraction on the Project site. Our evaluation found the ITTO Project to have been highly profitable for Treviso, even after their compliance with all Brazilian labor and environmental laws. This finding was based on field interviews and the examination of documents from IBAMA and Treviso. Treviso's mean internal rate of return from the Project was calculated to have been 35.79%, considerably higher than that generated by the region's farms and ranches. The ITTO Project positively impacted Project workers, providing employment and exposing them to rainforest management techniques that maximize timber production while minimizing forest destruction. The paper closes by suggesting that more of the direct and indirect benefits of new reduced impact logging projects on Brazilian national forest land need to be channeled to the local population to increase the probability of them act as capable forest custodians.     

从紧货币政策背景下的银行机构经营选择及赢利能力分析

从理论上讲,货币政策调整存在着利差变动效应,而实际利差直接影响着银行机构的盈利能力。但从实证结果来看,非对称加息、法定存款准备金率提高以及公开市场操作等政策工具对银行机构的实际利差影响效果都不明显,而对称性加息的效果显著。商业银行应该根据货币政策的实际利差变动效应采取应对措施。     

Are the profitability and investment factors valid ICAPM risk factors? Pre-1963 evidence

We empirically evaluate whether the profitability and investment factors from Novy-Marx (2013) and Fama and French (2015, 2018) are compatible with Merton’s (1973) intertemporal CAPM (ICAPM) framework in the pre-1963 period. We show that: (i) the covariance risk price estimates of the profitability factors are positive and statistically significant, which indicates that they have explanatory power with respect to the cross-section of stock returns; (ii) the investment factors carry insignificant covariance risk prices and are therefore not valid ICAPM risk factors; and (iii) the profitability factors forecast the first moment of the aggregate stock return and economic activity with the correct sign, which is consistent with their positive covariance risk price estimates and satisfies the sign restrictions associated with the ICAPM.     

The effect of code-sharing alliances on airline profitability

Code sharing and global alliances both have been increasingly adopted by airlines worldwide in recent years. A growing number of airlines, therefore, are embedded in networks of multilateral “coopetitive” (i.e., cooperative, but competitive) relationships that influence their product offering, pricing strategies, operating efficiency, market power, and their overall successes. There has been considerable research analyzing the benefits for airlines from joining global alliances, including bilateral code-sharing partnerships. However, the joint effect of code-sharing and global alliances on airline performance has not been fully investigated. In this paper, we study how the use of code-sharing strategies and their structural embeddedness into global alliances may impact airline performance. Using a unique dataset compiled from Flight Global and Airline Business's Annual Airline Alliance Report, the paper empirically investigates the joint benefits of code-sharing partnerships and global alliances on airline profitability. The results based on a group of 81 airlines during the 2007–2012 period show that the profit margin of an airline is positively associated with the number of code-sharing partners it has. Furthermore, the profit margin gains from code-sharing are greater when an airline has a higher proportion of its code-sharing partners in the same global alliance; i.e., allied code-sharing partners. Finally, we find no significant evidence that the percent of comprehensive code sharing partnerships to total partnerships has an impact on profit margin.     

Asset quality,non-interest income,and bank profitability: Evidence from Indian banks

This paper investigates whether a shift toward non-interest income activities improves the profitability of Indian banks and, if so, how it varies across ownership groups and banks with different asset qualities. Our findings show that higher share of non-interest income yields higher profits and risk-adjusted profits; in particular when banks are involved in more trading activities. The results indicate that private foreign banks earn more risk-adjusted profits compared to public sector and private domestic banks. Furthermore, we also find that income diversification benefits more to the banks that have lower asset quality compared to the banks that have higher asset quality. The findings are insensitive to dynamic panel data estimations and alternative sample specification. The results of this paper provide valuable insights for policymakers, and conclude that ensuring diversification activities enhances bank profitability, in particular for the banks that have lower asset quality.     

The fall of high-frequency trading: A survey of competition and profits

We investigate high-frequency trading (HFT) strategies, inventorying the strategies already studied in the literature and introducing innovative strategies detected by private institutional research. To this end, we expand the existing classification, and we offer names for new categories. In a complementary but original manner, we introduce counter reactions from professional traders in response to HFT predatory strategies. These human answers reverse the usual framework of competition between high-frequency traders (HFTs) and low frequency traders (LFTs) and also widen this cadre to HFTs algos (predators) versus execution algos.This survey notes that a continuous increase in competition, between high-speed trading algorithms themselves through predatory strategies and from professional human traders adapting and building adequate responses has made the business more difficult and has led to shrinking profits for HFT. In the end, we believe that excessive competition and a change in the current regulation (favorable to HFT) could kill the goose that laid the golden egg.     

The impact of working capital management on firm profitability in different business cycles: Evidence from Finland

The recent economic downturn of 2007–2008 has brought renewed focus on working capital policies. In this paper we examine the role of business cycles on the working capital–profitability relationship using a sample of Finnish listed companies over an 18-year period. We find the impact of business cycle on the working capital–profitability relationship is more pronounced in economic downturns relative to economic booms. We further show that the significance of efficient inventory management and accounts receivables conversion periods increase during periods of economic downturns. Our results demonstrate that active working capital management matters and, thus, should be included in firms’ financial planning.     

Sources of Financing,Profitability and Productivity: First Evidence from Matched Firms

This paper contributes to the literature on capital structure and firm performance. Using firm‐level data covering over 11,000 firms from 47 countries over a recent period of 1997‐2007, we address the effect of different sources of financing on corporate performance, employing a matching process, which allows an adequate `like‐for‐like’ comparison between high and low level of financing by firms. Robust to different matching estimators, the main findings are consistent with the theories of capital structure, in that firms with high debt‐to‐equity ratio tend to have lower returns to shareholders (profitability) and lower internal efficiency (productivity). The results become more robust when we separate the firms into advanced and emerging country‐groups or countries with high/low levels of financial development. Given the lower level of leverage below 50% on average in emerging markets (or in countries with lower level of financial reforms), firms in these economies face lower risk of financial distress and thereby less adverse effect on firm profitability and productivity, relative to their counterparts in advanced economies. We also find that retained earnings and equity financing improve performance, while debt financing by firms particularly in the form of bank loans leads to lower performance, although not so in the case of debt raised through issuing bonds.     

Firm versus Sector Effects on Profitability and Growth: The Importance of Size and Interaction

In this study we contribute to the long‐standing debate on the impact of firm versus industry effects on firm performance in three distinct ways; firstly by testing the firm, industry and their interaction effects on performance, secondly by examining the impact of each effect for different size groups, and lastly by measuring performance in terms of sales growth in addition to profitability. We use data of 71,750 UK firms, between 2002 and 2004, and employ moderated regression analysis for three sub‐samples namely micro, SMEs and large firms. With regards to profitability, we find the interaction effect to be significant in all sub‐samples for broad level of industrial aggregation (SIC4). For narrow industrial aggregation (SIC2), the interaction effect is only significant for micro firms. Neither of the above effects is significant for sales growth.     

产品差异化对我国财险公司赢利能力影响的实证研究——基于中国太保的案例分析

多年来,产品同质化严重影响到了保险公司的赢利能力。对于财险而言,“一险独大”的局面早已形成多年。财险市场的集中度逐年降低,财险公司间的竞争程度也与日俱增。其中,极具代表性的中国太保就因自身产品差异化程度较低而腹背受敌,并且2009年将市场份额第二的位置拱手让给平安保险后就遭遇发展瓶颈期,市场占有率停滞不前。本文通过量化中国太保的产品差异化程度和赢利能力,并建立多元线性回归模型来研究两者间的关系。最后,从政府和企业两个角度提出政策建议,希望对各财险公司的发展起到借鉴作用。