Search

Purpose – The purpose of this paper is to verify the existence of financial constraints for investment in Brazil, an emerging market with growing international visibility. Design/methodology/approach – Using panel data methodology and generalized method of moments (GMM), the paper estimates dynamic investment models based on the Euler equation and Tobin's q for a panel data set of 199 Brazilian non-financial firms for the time period 1995-2006. Findings – Results show that Brazilian firms face financial constraints since their investments depend on internally generated funds. Results are robust to different investment models based on the Euler equation, also controlling for growth opportunities. Significant investment-cash flow sensitivity has been found for the whole sample of firms. Subsamples of firms considered as under financial constraints, according to dividend payout and equity issuance policies, have higher investment-cash flow sensitivity. Investment-cash flow sensitivity of financially constrained firms in Brazil is higher than that in the UK and in Romania, a transition economy. Originality/value – The results extend empirical evidence of financial constraints in Brazil. The paper contributes to the literature by assessing the firms’ financial constraint status on an annual basis, and by using panel data methodology and GMM to estimate dynamic models of investment that take into account the proposals of the hierarchy of finance theory. In addition, the paper controls for growth opportunities. Capital market imperfections affect firm investment in Brazil and such effects are even stronger for financially constrained firms.

ResumenLa percepción hace referencia al proceso cognitivo a través del cual el individuo recibe información y se forma una imagen de la realidad que le rodea. Así, la percepción de los directivos que consta de dos fases (recepción e interpretación), actúa como filtro que determina cuáles son los inputs que intervienen en las decisiones empresariales. Nuestro objetivo es profundizar en el estudio de los factores que afectan a la percepción directiva. Por ello consideramos tanto factores individuales referidos a las cualidades cognitivas del directivo (perfil cognitivo del directivo) como factores contextuales referidos a las condiciones que rodean al proceso de percepción. Nuestra atención se centra especialmente en los primeros. El análisis empírico se realiza a través de un experimento controlado con potenciales directivos: alumnos universitarios. En concreto se analiza cómo perciben los individuos el efecto de un anuncio de OPA sobre la cotización de los títulos de la empresa objeto de OPA. Los resultados obtenidos reflejan cómo el proceso de percepción discurre por las dos etapas previstas (recepción e interpretación) y confirman que el estilo cognitivo individual es una de las variables más influyentes en dichas fases. Así, se comprueba que son los individuos más analistas los que son capaces de discernir entre estímulos relevantes e irrelevantes y mantienen una postura firme respecto al signo de la influencia. Por último, se constata también el efecto de la fiabilidad de la fuente y la nitidez del estímulo en las dos fases del proceso de percepción.AbstractManager's perception acts as a filter that determines what the stimuli are that shape corporate decisions. The goal of our research is to deep in the study of the factors that influence managers perception, with special emphasis on the manager cognitive profile. In particular, we analyse the phases included in the managers’ perception process (reception and interpretation) and the factors impacting such process. Thus, we consider not only individual factors related with the managers’ cognitive abilities but also contextual factors related with the characteristics of the stimuli and the source of information. An experiment involving university students was conducted for the empirical analysis. Specifically, we explore how subjects perceive the impact of takeover bid announcements on the target firm's stock price. Findings reflect how the perception process evolves along the two expected stages and bear out the importance of individual cognitive style as one of the most influential variables in the various stages. Findings also reveal that it is the more analyst individuals who are capable of distinguishing between relevant and irrelevant stimuli. Besides, the more rational subjects show the most congruent position as regards the influence of the announcement on the target stock price. Finally, the research also evidences the impact of the reliability of the source and the clarity of the stimulus on the two stages involved in the perception process.

RESUMENNuestro objetivo es analizar la decision de endeudamiento de las empresas espanolas, considerando los problemas de informacion asimetrica, los costes de agencia y la estructura de propiedad. Las hipotesis se establecen teniendo en cuenta el entorno institucional al que pertenecen las empresas. Para el analisis se utiliza un panel de datos incompleto de 111 empresas adquiridas durante los anos 1991–2001. Los resultados obtenidos indican que: i) La elevada concentracion accionarial de las empresas espanolas favorece el uso de la deuda para financiar sus oportunidades de crecimiento; ii) Las empresas con deficit de fondos recurren preferentemente, a los recursos externos mientras cuenten con una estructura de propiedad mayoritaria; iii) Las empresas cotizadas mantienen una velocidad de ajuste a su ratio de endeudamiento optima distinta a la de las empresas no cotizadas y a la de las empresas de otros paises.

We test hypotheses about the structure of corporate debt ownership and the use of bank debt by firms in a civil-law country, Spain. We focus on bank debt effects in the presence of information asymmetries and agency costs, and on efficient versus inefficient firm liquidation. We find that the relation between growth opportunities and bank financing is not as strong as the one found in common-law countries, that there is a positive relation between firm size and the proportion of bank debt used, and that firms closer to bankruptcy and highly leveraged are more likely to use bank debt.

Our aim is to analyze the type of lender and the debt maturity of Chilean firms as a function of their ownership structure and their growth opportunities. We perform the empirical analysis using an unbalanced panel data of 169 firms from 1990 to 2001. Our results show that Chilean firms with growth opportunities, ownership concentration, and a need for external funds issue short‐term bank debt to finance their new investments. This financing source is an efficient mechanism in Chile to alleviate agency and asymmetric information problems. The Chilean institutional environment influences firms’ decisions on banking debt.

Our aim is to test if the leverage and the debt maturity of Chilean firms quoted in the stock market are related with their growth opportunities, their ownership structure and the environment in which they operate. We perform an empirical analysis over an unbalanced panel of 169 Chilean firms for the period 1990-2001. Chilean firms growth opportunities are financed with long term debt. However, when firms need external funds they finance their growth opportunities with short term debt. The high ownership concentration, characteristic of Chilean firms, along with the presence of growth opportunities favours debt financing. The largest firms and the more needed of external financing prefer longer maturities for their debt. Finally, our results indicate that the presence of internal capital markets within a group influences firms financing decisions, particularly in those firms within the group with financing deficit. Pecking order theory offers partial explanations of Chilean firms financing decisions.

A board of directors is one of the most important corporate governance instruments available to banks. Another is the design of compensation packages for managers and directors to align their goals with those of other bank stakeholders: owners, creditors, depositors, taxpayers and regulators. Stakeholders can complement monitoring with incentive pay schemes by making the manager a residual claimant to the additional value obtained by his/her actions. However, compensation models for banks do not only have to align managerial and shareholder incentives, but must also avoid excessive risk-taking that may result in systemic risk (Bolton et al., 2010; Gordon, 2010).

The remarkable growth of literature about corporate governance during recent years is evidence of the importance that this issue has gained in the business world. The topic “corporate governance” is beginning to take the important place it deserves in the economics of organizations.

The growing importance of the intangible assets has caused a lot of research about them. The value creation capacity of such assets, mainly Research and Development (R&D) is in such a context. Much research about this has been done in USA in comparison to developing markets where such theme is almost unexplored. This work has the purpose to present a research about a possible economic effect of R&D investments in Brazil. Such investigation has been developed through a literature review about the question in the world and an empirical research in the Brazilian companies listed in Bovespa based on a linear regression in cross-section in the year 2003. We have used a model previously applied in other countries that has a capital R&D index as dependent variable explained by R&D intensity and other variables related to firm characteristics and performance. Although the low levels of R&D investments found, we have detected a signal of positive sensibility of the Brazilian market to such investments. This finding could be an indication that such market considers R&D investments as capable of generating future benefits. Additionally, we emphasize the need of using other models as well as considering other factors to mature the question that has been subject of extensive research in other countries