Financiamento de Longo Prazo: Explorando o Avanço Recente do Mercado de Debêntures Brasileiro

ABSTRACT Context: in Brazil, there was an expansion of private funding via bond issuances, especially since 2017. Before that period, the sources of long-term financing were concentrated on public funding. Objective: this study aims to explore the main factors that could have positively affect Brazilian bond market and if it would be possible to improve project financing through this debt instruments. Methods: using mixed methods with econometric tests and qualitative interview analysis, this study assesses which were the factors that supported this growth and if there is any difference across industries. Results: we found that a change in the market trend has indeed happened around 2017, and it was more pronounced in specific industries such as electricity. Interviewees suggested that increases in demand (possibly triggered by the reduction of public sources of funding and the fall in local interest rates) could be the main factors that supported this change in trend. Conclusions: therefore, this study reinforces the importance of local market conditions and government policies affecting the relative attractiveness of private versus public sources of corporate investment.

Long-term Financing: Exploring the Recent Advances in the Brazilian Bond Market

ABSTRACT Context: in Brazil, there was an expansion of private funding via bond issuances, especially since 2017. Before that period, the sources of long-term financing were concentrated on public funding. Objective: this study aims to explore the main factors that could have positively affect Brazilian bond market and if it would be possible to improve project financing through this debt instruments. Methods: using mixed methods with econometric tests and qualitative interview analysis, this study assesses which were the factors that supported this growth and if there is any difference across industries. Results: we found that a change in the market trend has indeed happened around 2017, and it was more pronounced in specific industries such as electricity. Interviewees suggested that increases in demand (possibly triggered by the reduction of public sources of funding and the fall in local interest rates) could be the main factors that supported this change in trend. Conclusions: therefore, this study reinforces the importance of local market conditions and government policies affecting the relative attractiveness of private versus public sources of corporate investment.

Impact of the COVID-19 Pandemic on the US Credit Default Swap Market

The COVID-19 pandemic affected the US economy at different levels. Since credit default swaps can be viewed as a default probability indicator, the article shows the credit default swap market perspective on how the US economy was hit by the pandemic. Forecasting models are built to estimate the predictability of the CDS market sectors during the pandemic, i.e., manufacturing, energy, banks, consumer goods, and services and financial sector excluding banks. Econometric tests are applied to check the uniqueness of credit default swap market sectors after the declaration of the pandemic. The results indicate that the financial sector excluding banks performed uniquely during the pandemic; i.e., the predictability of this sector dropped significantly, and the Chow breakpoint test and Wald coefficient test can identify the shift in the data after declaration of the pandemic.

The Role of Exports in African Economic Development: A Comparative Study of Mauritius and Tunisia

<p>Mauritius and Tunisia stand out as two remarkable exceptions to the African economic growth experience. Since their respective independences in 1968 and 1956, both have achieved average real GDP per capita growth well in excess of three percent per year. Export policies featured highly in the developmental strategies of both countries as they transitioned through a dependency on agriculture into manufacturing and then services. What makes this comparison so interesting is that despite such similar success, Tunisia and Mauritius are fundamentally very different. This study comprises the first ever in-depth comparison of these two countries, presenting a qualitative analysis and then augmenting it with a comprehensive set of econometric tests. The focus is on the relationship between exports and economic growth, but the discussion explores the wider context in both countries. Using the Granger-causality approach, we find strong evidence for export-led growth in Mauritius, but no significant evidence of any causal relationship in Tunisia. On the basis of a broader analysis we argue that exports were still important in both countries, but appear to have been more central to the growth process in Mauritius. This broader analysis also highlights that other factors – such as a strong institutional environment – were important in facilitating or directly contributing to such consistent growth.</p>

The Role of Exports in African Economic Development: A Comparative Study of Mauritius and Tunisia

<p>Mauritius and Tunisia stand out as two remarkable exceptions to the African economic growth experience. Since their respective independences in 1968 and 1956, both have achieved average real GDP per capita growth well in excess of three percent per year. Export policies featured highly in the developmental strategies of both countries as they transitioned through a dependency on agriculture into manufacturing and then services. What makes this comparison so interesting is that despite such similar success, Tunisia and Mauritius are fundamentally very different. This study comprises the first ever in-depth comparison of these two countries, presenting a qualitative analysis and then augmenting it with a comprehensive set of econometric tests. The focus is on the relationship between exports and economic growth, but the discussion explores the wider context in both countries. Using the Granger-causality approach, we find strong evidence for export-led growth in Mauritius, but no significant evidence of any causal relationship in Tunisia. On the basis of a broader analysis we argue that exports were still important in both countries, but appear to have been more central to the growth process in Mauritius. This broader analysis also highlights that other factors – such as a strong institutional environment – were important in facilitating or directly contributing to such consistent growth.</p>

Do Size-dependent Tax Incentives Discourage Plant Size Expansion? Evidence from Panel Data in Indian Manufacturing

The article presents a new empirical application of the idea of threshold burden of tax incentives in India. The Indian government provided tax exemption to manufacturing units with sales turnover below a specified level over the years. The turnover threshold limit was US$1 million in 2009. Whether size-based tax rules incentivise firms to reorganise their production structure in order to stay below the threshold to take advantage of fiscal incentives is the key question addressed in this article. A significant factor that is widely believed to encourage small firms to stay small has been the tax incentives in the form of excise tax (turnover tax) exemptions below a specified value of sales each year. A key strategy followed by Indian firms to stay small and below the threshold has been product subcontracting or capacity subcontracting. We provide econometric evidence on this particular mechanism. The study is based on a unique unbalanced panel data of 29,213 manufacturing plants spanning the period 1999–2008 and a panel of 4,613 manufacturing firms covering the period 1990–2010. Average subcontracting intensity was found to be significantly higher in manufacturing establishments and firms with sales turnover below the ceiling level set by the tax rules. Econometric tests supported the hypothesis that establishments take advantage of tax incentives by staying below the threshold value of output. Econometric tests for a subgroup of domestic-market-oriented firms provide additional support to the hypothesis of threshold effects. These findings are relevant for policy design in developing and emerging economies. JEL Classification: O14, O17, L60, H32, H25

Current and Capital Account Dynamics in India: An Empirical Analysis of the Post-Reform Period

This article analyses the dynamics between current account (CA) and capital account in post-liberalisation India. Contemporaneous occurrence of CA deficit along with capital account surplus suggests the possible causal relationship between the two accounts. The theoretical debate around capital account liberalisation (KAL) is developed with the intention to lend support to empirical results for policy formulation. The analysis of arguments for and against KAL liberates us in interpreting the empirical results. Within the framework of KAL, this article proceeds to estimate the relationship between current and capital account. A set of econometric tests are performed on an Indian quarterly data over the period from 1996 to 2018. Econometric analysis reveals that capital account affects CA negatively. Short-run capital and debt flow also affect CA negatively, while foreign direct investment (FDI) affects it positively. We find debt flow to be an important factor, contributing to CA imbalance. Such dynamics is critical for any decision about KAL. From the analysis, it is observed that India needs to encourage FDI, while maintaining strict control over short-term capital, which is highly disruptive, and proceed cautiously towards full KAL. JEL Codes: C32, F21, F32

The Impact of Human Capital Underutilization on Productivity and Economic Growth in Egypt

This study estimates the effects of human capital underutilization on economic growth and productivity. This paper investigated the relationship between underutilization of human capital and economic growth using a variety of econometric tests like the Augmented Dickey Fuller test, the Johansen Integration test, and the ARDL model. The results indicate that, there is a negative relationship between human capital underutilization and economic growth. The results indicate that underutilization of human capital has a greater long-term impact on economic growth than it does in the short run. Reforms to education and training systems are required in order to maximise human capital utilisation and thus increase productivity and economic growth.

The Impact of Human Capital Underutilization on Productivity and Economic Growth in Egypt

This study estimates the effects of human capital underutilization on economic growth and productivity. This paper investigated the relationship between underutilization of human capital and economic growth using a variety of econometric tests like the Augmented Dickey Fuller test, the Johansen Integration test, and the ARDL model. The results indicate that, there is a negative relationship between human capital underutilization and economic growth. The results indicate that underutilization of human capital has a greater long-term impact on economic growth than it does in the short run. Reforms to education and training systems are required in order to maximise human capital utilisation and thus increase productivity and economic growth.

Do socially responsible firms always disclose high-quality earnings? Evidence from an emerging socialist economy

PurposeThis paper aims to investigate the linkage between corporate social responsibility (CSR) and earnings quality (EQ) in the context of Vietnam, an Asian emerging economy characterized by high growth for decades and a socialist orientation. As CSR firms are expected to have high EQ, there arise concerns that corporate managers of CSR firms may use the reputation of the firm as a protection mechanism against the cost of earnings management.Design/methodology/approachThe study uses a unique sample of Vietnamese CSR firms listed on Hanoi and Ho Chi Minh Stock Exchanges from 2015 to 2019. Several econometric tests are conducted to investigate whether corporate managers of CSR-active firms actively engage in earnings management and reduce the firms' EQ.FindingsThe empirical results show a negative impact of CSR on EQ, meaning that, in general, corporate managers of CSR firms in Vietnam opportunistically manage earnings. This confirms the paradox of the CSR–EQ relationship. In line with an emerging strand of research in the CSR literature, the finding suggests that the agency problem arises in CSR firms where corporate managers use their managerial discretion over accrual accounting to manipulate reported earnings.Practical implicationsThe finding has practical implications for market participants and policymakers in improving monitoring mechanisms and enhancing the information environment in developing capital markets.Originality/valueThis is the first study in the literature that investigates and shows the paradox of the CSR–EQ relationship in the context of Vietnam, a new emerging economy that follows socialist orientation.