Search

This study analyzed the effect of industrial and international diversification on the profitability and operational risk of Brazilian companies. The sample comprised 210 publicly traded Brazilian companies, who trade shares on the B3 stock exchange. The results of the study showed that industrially diversified companies both reduce operational risk and increase profitability in terms of return on assets, while companies that are internationally diversified reduce their profitability. As well, the companies that diversify both industrially and internationally, see increasedoperational risk. This study is relevant to the investigation of the relationship of industrial and international diversification in companies' operating results, as it indicates that, in the context of Brazil, industrial diversification tends to improve operating results, with an increase in profitability and a reduction in operating risk. [ABSTRACT FROM AUTHOR]

The phenomenon of transfer pricing has emerged as common practice among highly diversified companies. It can be qualified as "prices with related parties" including specifically transfer of goods, providing of services, transfers and other transactions concerning intangibles, cost contribution, arrangements and business restructurings. In a context of growing globalization and in view of the importance that multinational companies are assuming in the economic world, the regulation of transfer pricing represents an issue of significant importance, both for taxpayers and financial administrations, as it allows the determination of companies' taxable income operating inside tax jurisdictions. [ABSTRACT FROM AUTHOR]

The authors investigate how diversified business groups influence the structural reform–firm strategy relations given its effect on strategic choice and its implementation in a large emerging economy: India. By integrating business group, industrial organization, and international business literature, the authors predict considerable differences in the exporting behavior of business group–affiliated firms on the basis of their market competitiveness and governance dynamics. The authors test their predictions empirically with longitudinal data of 6,119 Indian firms over a 21-year period starting from 1991–1992 to 2011–2012 and find support for most of the hypotheses. These findings suggest that knowledge of the heterogeneity within business groups are essential for understanding the response of business group affiliates in light of the progression of reform process in India. This study thus contributes to a more complete conceptual understanding of the strategic responses of promarket reforms of business group affiliates in emerging economies. [ABSTRACT FROM PUBLISHER]

In 2015, Brazil has taken steps toward re-consolidating its domestic defense industry. In the 1980s, Brazil built a dynamic and diversified defense industry. The state-driven effort resulted in a tripod strategy, where the state, state-run companies, and their private sector became the pillars of Brazil's defense industry. Brazil developed an export-driven defense industry; where close to 80–90% of its output was exported to Latin American, African, Arab, and Asian nations. In the 1980s, Brazil became the world's fifth largest exporter of defense products and services, exporting to over 40 countries. In the 1990s and 2000s, Brazil's defense industry suffered a dramatic reduction in size, diversification, and momentum. Successions of domestic political and economic policies have relegated Brazil's once emerging defense industry to a marginal position in the global defense industry. This article analyzes future prospects, challenges, and growth strategies for Brazil's defense industry. [ABSTRACT FROM AUTHOR]

The article discusses an economic growth strategy for independent communities to use their local talent and thrive in the face of the changing economic conditions. It explores the do-it-yourself economy approach that is founded on small, locally-owned, but diverse businesses. It recommends an economic development strategy that needs to consider innovative tools to deal with the changing reality.

El Salvador has undergone a deep economic transformation over recent decades, from a model based on agro-exports to an open, transnational service-based economy. This transformation has occurred in a context dominated historically by a small group of elite families that formed family-owned diversified business groups (DBGs). This paper studies the leading groups' strategies in confronting transnationalisation. It shows that the DBGs have adapted to the new realities through a combination of sector shifts, internationalisation and the adoption of different kinds of relationships with multinationals. In spite of this, there is little evidence that the DBGs have become less important or subordinate to multinational corporations. Rather, they have, in different ways, exploited their local and regional knowledge and networks to confront competition at home and expand at the regional level. [ABSTRACT FROM PUBLISHER]

The article outlines the story of the finance success over the last 30 years, which has been accepted by senior policy-makers and regulators, and the creation and dominance of the big financial conglomerates. It contrasts the story with an account of the harms caused by finance and the conglomerates. It explains why the U.S. President Barack Obama Administration's preference for incremental reform of the conglomerates will not succeed, because the firms will control and undermine the reforms.

This study assesses the interactive effects of product diversification (PD), multinationality (MN), and country involvement (CI) on firm performance, and explores these effects not only in pairs but also in groups. It locates the optimal combinations of these three variables that will help firms to maximize their performance. The results indicate that when these three variables interact in pairs (that is, MN and CI, respectively, interact with PD), their impact on firm performance are opposite, when they interact as a group (MN and CI jointly interact with PD), they mutually strengthen or cancel each other out, and the optimal combinations differ depending on the interactions of PD with MN and CI. [ABSTRACT FROM AUTHOR]

Abstract: The paper examines restructuring cycles among diversified major telecom operators from two different perspectives, the governance deficiency perspective of agency theory and the governance efficiency perspective of transaction cost economics, the former being less consistent with the spirit of recent pro-competitive regulatory reforms than the latter. This restructuring cycle describes how incumbent operators grew larger and more diversified during the telecom boom before they were transformed into more efficient scale and scope either by economizing managers or by market forces along with actively intervening owners and bondholders during the subsequent telecom bust. A cycle whose expansion phase is characterized by highly acquisitive companies expanding into non-related activities followed by a delayed contraction phase where overdiversified companies are being restructured by market forces and intervening owners and bondholders is consistent with the reform-non-compliant governance deficiency thesis of agency theory. A cycle whose expansion phase is characterized by acquisitive companies expanding into related activities followed by a contraction phase where companies are restructured by their own managers after having realized that previously acquired assets have become more redeployable and their services more tradable is consistent with the reform-compliant governance efficiency thesis of transaction cost economics. Now, in the aftermath of the contraction phase of the business cycle, more narrowly focused incumbents are once again ready for another round of acquisitive expansion. Anecdotal evidence from five restructuring cases, along with available secondary information about the development of the industry, seems to support the reform-noncompliant governance deficiency thesis of agency theory rather than the reform-compliant governance efficiency thesis of transaction cost economics. [Copyright &y& Elsevier]

The purpose of the study was to propose an index of corporate diversification. The use of the index was illustrated in a case study of the past and current levels of diversification of television network parent companies in relation to their future-oriented diversification ventures in the new media. The results of the industry case study indicated that the parent companies that are currently the least diversified are most active in new media ventures. [ABSTRACT FROM AUTHOR]