Entrepreneurship and Unemployment

The COVID-19 pandemic is having a very negative economic and social impact on Portugal's economy, with the year 2020 expected to represent the largest economic recession since the 1970s. According to the Bank of Portugal forecasts, employment is expected to fall significantly, with the unemployment rate estimated at around 10%, with a special focus on young graduates. Simultaneously, several research papers have revealed the importance of entrepreneurship in job creation and economic development, highlighting the role of entrepreneurial ecosystems and government support for creating successful businesses. In this sense, this study has as its main objective to characterize a support program to the investment of young unemployed entrepreneurs and evidence its potential impact on Portugal's economic growth and social progress.

Analyzing the Impact of the COVID-19 Pandemic on Value Creation

Operating in an already challenging business environment, companies have faced yet another difficulty since March 2020, when the World Health Organization (WHO) declared a global pandemic situation related to the COVID-19 disease. The study's purpose was to analyze the value creation in Euronext Lisbon companies from the first semester of 2019 to the first semester of 2020. The aim was also to identify the areas with the most impact on value creation. To measure value creation, the indicator economic value added (EVA®) was used. The results revealed that the capacity to create value decreased for all companies. The variables included in the study that showed a statistically significant relationship with EVA® were operating profit, sales revenue, and cost of equity. This pandemic situation poses a significant threat to value creation, enhancing the idea that, more than ever, business management needs to focus on long-term value creation strategies.

Do the Stock Market Indices Follow a Random Walk?

This chapter aims to test the hypothesis of an efficient market, in its weak form, in the stock markets of Brazil, China, South Korea, USA, Spain, Italy, in the period from December 2, 2020 to May 12, 2020. The results show that the market efficiency hypothesis is rejected in all markets. In corroboration the DFA exponents show long memories, which put in question the market efficiency, in its weak form, suggesting that the stock markets analyzed show some predictability. In conclusion, investors should avoid investing in stock markets, at least while this pandemic lasts, and invest in less risky markets in order to mitigate risk and improve the efficiency of their portfolios.

A Study on the Performance of Indian Mutual Funds in Recent Years

The Indian mutual fund industry is an integral part of the Indian financial industry. The mutual fund industry has a significant impact on the Indian economy. This study aims at understanding the growth and performance of mutual fund industry and understanding the cause and effect through empirical research. For this research, published papers have been studied and analysed to give a better understanding of the industry. This study records the performance of Indian mutual funds from the year 2015-2020. It analyses the performance of the debt, equity, and ETF mutual funds. The challenges are huge, but the investors have shown a matured behaviour. The 2020 pandemic has allowed investors to balance their portfolios by removing poor performing mutual fund holdings.

The Impact of Macroeconomic Factors on the Hotel Industry Through the Financial Leverage Trends

In Portugal, news shows that the impact of COVID-19 in the hospitality sector was more noticeable compared to other sectors. This chapter aims to understand the historical trends of hotel industry financial leverage and to analyse the impact of macroeconomic factors on it. Based on the Portuguese reality, it aims to propose a model to be used by managers and shareholders to control the effect of financial leverage over their companies. Two issues are supporting this study: one is if companies evaluate the impact of the chosen financing sources on shareholders' return; another is to understand whether there is a change in the financial leverage effect, either due to macroeconomic factors or due to cyclical factors not controlled by the market, such as the current pandemic (COVID-19) which demands new challenges to companies. Results highlight that the perception of financial leverage by hotel managers is crucial in crisis situations, as the current case of the pandemic caused by COVID-19.

Distributional Uncertainty for Spectral Risk Measures

Spectral risk measures, primarily introduced as an extension for expected shortfall, constitute a prominent class of risk measures that take account of the decision-makersrisk-aversion. In practice, risk measures are often estimated from data distributions, and due to the uncertain character of the financial market, one has no specific criterium to pick the appropriate distribution. Therefore, risk assessment under different possible scenarios (such as financial crises or outbreaks) is a source of uncertainty that may lead to concerning financial losses. The chapter addresses this issue, first, by adapting a robust framework for spectral risk measures, by considering the whole set of possible scenarios instead of making a specific choice. Second, the author proposes a variability-type approach as an alternative for quantifying uncertainty, since measuring uncertainty provides us with information about how far our risk measurement process could be impacted by uncertainty. Furthermore, the stated theory is illustrated with a practical example from the NASDAQ index.

The Impact of European Funds in View of Company Value Creation

Over the last few years, business management has become quite complex, leading to constant risks in the business context resulting from economies' globalization, not only by the frequent change in the organizations' proprietary structure, but also due to technological innovation and competitiveness in the global market. The sum of all the factors referred to above and the actual pandemic situation has substantially increased the level of risk in current or strategic management decisions taken within the scope of the organizations' activity. Thus, the aim of this research is to study the impact of EU funds on Portuguese companies by analyzing companies that have benefited from European incentives under the innovation incentive system, since it covers financing investments of global and strategic nature in productive areas. In this sense, the sample includes the companies that had projects approved in 2014 and aims to verify the impact of these incentives on the capacity of value creation, as well as on job creation and internationalization level in years of 2015, 2016, 2017, and 2018.

Idle Costs in the Pandemic

This chapter focuses on a crucial crisis issue with consequences that have affected many companies worldwide, the spread of the COVID-19 pandemic. Deliveries were cancelled, and many companies closed their facilities completely around the world. Taking into account the capacity and structural nature of fixed costs, activity-based cost estimation may be more appropriate than traditional cost estimation to create the capacity to manage production cost structures to eliminate possibilities for idle costs, as these are a function of using the capacity offered to the installation. This chapter theoretically presents the relationship between the main costs of idleness, crisis, and profitability as a measure of the company's value. This is important, as the company's value can be delayed by the occurrence of a crisis, and the health pandemic has created a field emerging from research with advances in strategic cost management.

Credit Risk Aversion Model During Economic Downturns and Recovery

Credit defaulting in the financial sector is a worldwide delinquency that has become a nightmare for this sector. The search for a solution to root out this problem remains a big challenge for academics, the financial sectors, and the governments. For instance, per the American Bankers Association's (ABC) Consumer Credit Delinquency Bulletin, unserviced bank cards plunged two basis points to 2.96% of all accounts between July-August 2019. This value remained below the 15-year average of 3.68%. (Per ABC, delinquency is a late payment that is 30 days or more overdue.) Though these terrifying statistics sounds like good news, the Trans Union's Industry Insights Report found that the unserviced credit card rate reached 1.81% in the third quarter of 2019, rising from 1.71% for the third quarter of 2018. These figures from the credit bureau are based on accounts that are 90 days or more overdue.

Financial Capacity During a Pandemic Crisis

This chapter seeks to provide empirical evidence of the financial shocks that non-profits experienced during the coronavirus disease-19 (COVID-19) pandemic lockdown period. The research included a literature review of the main up-to-date publications to understand non-profits' financial vulnerabilities. The statistical analyses' results facilitate a fuller understanding of the impacts that the abrupt loss of clients, volunteers, and employees due to the pandemic has had on non-profits' finances. These results are discussed in light of the previous studies. Through computer-assisted text analysis, this study examined non-profit managers' perceptions of the most significant challenges faced by these organisations in the pandemic's initial phase. The findings reveal a dramatic situation characterised by a decrease in revenues and increase in expenses, in which non-profits regulated by Portugal's social welfare private institutions statutes were the most strongly affected. The most salient challenges identified include technological preparedness, safety assurance, and physical distancing.