Gualter Couto

High Speed Rail Transport Valuation

In this paper, the optimal timing for investing in high-speed rail projects under uncertainty in relation to the utility provided to railway users was investigated. To accomplish this, a continuous time real options analysis framework using a stochastic demand model was developed to determine the optimal time to invest. Uncertainty upon investment expenditures was also added in an extended framework. The value of the option to defer and the investment opportunity value were also assessed.

Measuring the Impact of International Financial Reporting Standards (IFRS) in Firm Reporting: The Case of Portugal

To increase efficiency of the European finance market, the European Union (EU) recently forced all public companies to publish their financial disclosures with the support of the International Financial Reporting Standards (IFRS), emanated by the International Accounting Standards Board (IASB), beginning January 1, 2005. In this paper, we measure the impact of the application of IFRS to financial information of Portuguese public companies belonging to the Eurolist by Euronext Lisbon. The results show that the Balance Sheet and Income Statement structures of the firms studied suffered relevant accounting conversions in the process of compliance. Nevertheless, we did not find a clear pattern for the accounting variations. IFRS implementation conditioned the measure made to the performance and the financial position of the business companies in Portugal.

High-speed rail transport valuation and conjecture shocks

In this paper, we derive the optimal investment policy in a high-speed rail transport (HSR) project. We assume that the source of uncertainty comes from the annual demand, and that it follows a geometric Brownian motion with jumps of random magnitude, occurring in random times, according to a Poisson process. We assess the impact of these shocks on the demand threshold, along with the investment opportunity value and option to differ. We consider several distributions for these jumps, and we compare with the no-jumps case. Numerical results are presented, showing the importance of assumptions about the underlying stochastic process.

Quality of the Azores destination in the perspective of tourists

Tourism is a growing industry in the Autonomous Region of the Azores. However, little is known about how tourists evaluate this destination, something which certainly constitutes a shortcoming if one takes into consideration that this is a very competitive industry, with new destinations appearing every year and others increasing their market share. This paper focuses on the quality of the Azores destination in the perspective of tourists and, to an extent, has the goal of contributing to reduce this shortcoming. According to our findings, 74 per cent of the tourists interviewed consider the global quality of the Azores destination to be very good or excellent, with the landscape, the climate/weather, the hospitality, the cleanliness and the security being the most highly rated partial indicators. Additionally, a regression analysis indicates that the evaluation of the global quality of this destination varies according to the individual characteristics of tourists.

Entrepreneurial Potential in the Younger Generation

Abstract Given that entrepreneurship plays a key role in the development of a countrys economy, governments should stimulate entrepreneurial orientation, particularly among youngsters. In this context, we applied a framework with which to screen school populations in the Azores Islands, Portugal, for prospects of entrepreneurship and to study the profiles of those who demonstrate an entrepreneurial orientation. This work led to the following main findings: first, that a quarter of all senior students in high school in the Azores Islands have potential for entrepreneurship and, second, that this same group shows a well-defined psychological profile that may vary depending on the willingness to expend effort.

High-speed rail transport valuation with stochastic demand and investment cost

ABSTRACT This paper extends Couto, Gualter, Cláudia Nunes, and Pedro Pimentel [(2015). ‘High-speed Rail Transport Valuation and Conjuncture Shocks.’ European Journal of Finance 21(10–11): 791–805] high-speed rail (HSR) transport valuation framework using real options analysis to embrace the stochastic investment costs. Optimal timing to invest, value of the option to defer, and investment opportunity value are assessed considering uncertainty about HSR demand and investment expenditures, both following a geometric Brownian motion with jumps driven by Poisson processes. The numerical results show consistency with the results presented in Couto, Nunes, and Pimentel (2015).

Tourism Development Potential in an Insular Territory: The Case of Ribeira Grande in the Azores

The Autonomous Region of the Azores is one of the most sustainable destinations in the world. Being an archipelago comprised of nine small islands, quality and sustainability are critical features in the tourism sector, inducing the need for thorough and technical strategic development processes. Ribeira Grande is an importantmunicipality in the Azores, which envisioned tourism as a strategic sector to develop when the partial liberalization of the air passenger transport sector occurred in 2015. However, this destination had little tourism maturity and competitiveness and required some structural planning work. The development of a strategic plan for tourism forthe municipality of Ribeira Grande, including the selection of tourism products, is explained in detail in this article, which highlights the main challenges and results of the process.

The satisfaction of the Nordic tourist with the Azores as a destination.

Abstract The Northern European markets are considered strategic for the Azores, one of the outermost regions of Europe. Progressively, the Azores are becoming a desirable destination to inhabitants of modern and stressful urban areas of Europe. Because tourism is a very competitive business worldwide, it is crucial to employ tourism policies that enhance competitiveness. It is reasonable to argue that these policies should be guided by accurate knowledge of the strong and weak characteristics of the Azores, as a destination competing in a global market. Under this context, this study seeks to comprehend how the typical Nordic visitor feels pleased with his stay in the Azores. Using a large database of responses from tourists, we employ statistical methods to assess the degree of satisfaction of the average Nordic visitor with the Azores as a destination.

Some results on relocation policies

In this paper, we derive general results concerning optimal relocation policy under some assumptions. We consider a firm that is located in a specific location, producing at a certain level of efficiency. With time, the firm can decide to change its location to a new and more efficient site, paying relocation costs. Moreover, we assume that these new sites become available according to a Poisson process, and that the levels of efficiency improvement inherent to each one of these sites are random variables. With this framework, we characterise certain parameters of the optimal relocation policy. In particular, we characterise the expected relocation time and we prove that it depends on the distribution of the level of efficiency improvement only through an expected value. Therefore, the optimal policy shows a kind of robustness in terms of the stochastic assumptions of the problem, which has a major impact in the application of relocation policies. In addition, we also characterise the optimal relocation time. Impacts on the final results driven by the characteristics of the firms original location site, the market environment and the way in which risk is modelled are studied numerically. The overall results are in line with economic intuition.

Real Options Valuation: An Application to the Portuguese Real Estate Market

The contribution of real options analysis on the valuation of Portuguese undeveloped building sites is significant on the decision making regarding the apartment-buildings construction. Using the options model developed by Quigg (1993), and including the necessary readjustments for the Portuguese market, it was found that the scale price elasticity parameter and construction expenditures’ elasticity of scale parameter had a strong impact on building sites’ values. The empirical analysis revealed that the option to defer adds value to undeveloped building sites’ valuations. This fact cannot be ignored when deciding upon an investment’s implementation.