Christian Espinosa

Diversification and control in emerging markets: the case of Chilean firms

We analyze the effect of two types of corporate diversification (business diversification and ownership diversification) on the market value of the Chilean firms. For a sample of 83 nonfinancial firms listed on the Santiago Stock Market from 2005 to 2013, we find a discount for both business and ownership diversification, which is consistent with that reported for other economic or institutional settings. Second, we find that the business diversification discount is related to the ownership structure and is due to the excess of the largest shareholders’ control rights. Third, we find that the ownership diversification discount becomes a premium when the ownership diversification enables the control of the affiliated firms. This effect can be explained by the improvement of internal capital markets that allows overcoming the limitations of Chilean external capital markets.

Is there a corporate diversification discount or premium? Evidence from Chile

Purpose The purpose of this paper is to analyze the effect of the corporate ownership diversification, i.e. how the involvement in the ownership of other non-financial firms affects the value of listed firms. The authors control for the unrelated diversification when the firm has different business segments in different sectors. Design/methodology/approach The authors analyze a sample of Chilean-listed firms between 2005 and 2009, in two stages. First, the authors compute the diversification premium or discount, defined as the part of the firms’ capitalization that stems from the diversification strategy. Then, the authors regress the premium or discount against the business and ownership diversification measures and other control variables. Findings In addition to a discount for unrelated business diversification, the authors find an ownership diversification discount when non-financial firms are shareholders of other firms. However, this discount turns into a premium when the firm gains the control of t...

Dos haplotipos de Capsella bursa-pastoris en Chile continental soportan multiple introducción

La bolsita de pastor (Capsella bursa-pastoris, Brassicaceae) es una maleza de distribucion global. En Chile, esta especie fue introducida tempranamente durante la colonizacion espanola, sin embargo, estudios previos basados en aloenzimas y fragmentos RAPD indican que las poblaciones del extremo sur de Chile estarian emparentadas con poblaciones provenientes de Inglaterra. En el presente estudio se analizo la variacion geografica de tres secuencias de cpSSR pertenecientes a 286 individuos de C. bursa-pastoris (ATCP46615, ATCP66701 y ATCP31017). Se recolectaron plantas de 14 poblaciones distribuidas en un amplio gradiente latitudinal en Chile continental. Solo uno de los marcadores mostro variacion (ATCP31017), lo que muestra la presencia de dos haplotipos de C. bursa-pastoris en el territorio. La distribucion geografica de estos haplotipos apoya la hipotesis que plantea que C. bursa-pastoris en Chile continental fue introducida al menos en dos oportunidades.

Adoption of IFRS in an emerging market: the Chilean case

Purpose The purpose of this paper is to analyze the impact triggered by adopting International Financial Reporting Standards (IFRS) in South America. In order to do this, the case of Chile is considered, as it was the first country in the region to adopt IFRS in full form from 2009. Design/methodology/approach The authors analyze a sample of 43 Chilean companies. The analysis has two stages. First, the authors analyze if the adoption of IFRS in Chile produced a statistically significant change in the main financial indicators. Then, the authors analyze the market reaction to the announcement of the adoption and implementation of IFRS, by doing an event study. Findings The authors found that adopting IFRS in Chile produced a statistically significant change in the main financial indicators, except for in leverage and Price-Earnings Ratios. As for the main accounts of the financial statements, the authors found significant differences, with the exception of inventories and current assets. However, after ass...

Nonlinear behaviour in EMBI series from Eastern Europe: evidence of 'window size effect'

The main objective of this article is to explore how the number of observations included in a window may impact the rejection rate of linear windows. We employ two methodologies proposed in the literature in order to study the linear and nonlinear behaviour. We use daily Emerging Markets Bond Index (EMBI) index spreads from six of the most important Eastern European countries (Bulgaria, Hungry, Poland, Russia, Serbia and Ukraine). The empirical results show what we call ‘window size effect’ because when we include more than 50 observations in each window, the rejection rate increases using the two different methodologies. Therefore, our findings support the idea that, even in this well informed and sophisticated market, the weak-form of the efficient market hypothesis cannot be confirmed.

Diversification in Emerging Markets: The Case of Chilean Firms

This study is the first to analyze the effect on firm value of companies when they participate in the ownership of others companies in an emerging South American economy. For a sample of 83 non-financial Chilean companies traded in the 2005-2009 period, we find evidence of a discount for participate in ownership of other companies. However, this discount turns into a premium when participation in the ownership of another company results in control, especially in related sectors. In addition, we find a discount for unrelated corporate diversification similar to that found for other economies.