Paulo Maçãs Nunes

Does tourism influence economic growth? A dynamic panel data approach

On average, tourism-specialized countries grow more than others. This is not consistent with the core of modern economic growth theory that suggests that economic growth is linked to sectors with high-tech intensity and large scale. In this article, we use appropriate panel data methods to study the relationship between tourism and economic growth. In general, we show that tourism is a positive determinant of economic growth both in a broad sample of countries and in a sample of poor countries. However, contrary to previous contributions, tourism is not more relevant in small countries than in a general sample. † This is a fully modified version of a working-paper co-authored by one of the authors.

Profitability in Portuguese service industries: a panel data approach

Based on various panel models, we study the profitability determinants of Portuguese service industries. The results obtained show that profitability is persistent over time, and that for larger companies with greater growth, a lower level of debt and lower level of fixed assets are more profitable. Considering the results obtained, we can conclude that diversification of activities and motivation as well as the tendency to innovate contribute positively to increased profitability in Portuguese service industries, whereas the need to pay off debt charges periodically harms profitability. The government would be well advised to create special credit channels that would permit the greater growth of Portuguese service industries, especially those most inclined to innovate.

Are the determinants of young SME profitability different? Empirical evidence using dynamic estimators

Using two step method, namely probit regressions and dynamic estimators, and on the basis of two sub-samples of Portuguese SMEs: 1) 495 young SMEs; and 2) 1350 old SMEs, this study seeks to verify if age is a important factor of the relationships between determinants and profitability. Age, size, liquidity and long-term debt are of greater relative importance for the increased profitability, while risk is of greater relative importance for diminished profitability of young SMEs, compared to the case of old SMEs. R&D expenditure is of greater relative importance for increased profitability in old SMEs. Additionally, old SMEs have more persistent profitability than do young SMEs.

Capital Structure of Portuguese Service Industries: A Panel Data Analysis

Using panel data for the period 1999–2003, this study shows that internal and external financing are not perfect substitutes, not corroborating the theorem of Modigliani and Miller. Portuguese service industries prefer internal to external financing, corroborating Pecking Order theory. The bigger the size of the company, the greater the level of debt, corroborating Trade-Off and Signalling theories. The negative relationship between the amount of fixed capital and debt corroborates Agency theory. The results allow us to conclude that debt contributes to improving management efficiency, agency problems between shareholders and creditors having little relevance.

Firms’ leverage and labour productivity: a quantile approach in Portuguese firms

We show that the leverage of Portuguese firms tends to negatively affect its labour productivity for firms with relatively lower labour productivity but to positively affect this variable for firms in the right-hand side of the productivity distribution. This is particularly important in a country where labour productivity is persistently lower compared with the richer countries in Europe. Thus, we have concluded that, controlling for the usual effects, increasing leverage cannot be a solution for the less productive (and consequently the majority) of Portuguese firms.

Gibrat’s law: empirical test of Portuguese service industries using dynamic estimators

Using dynamic panel estimators, this article shows rejection of Gibrat’s law for Portuguese companies in the service sector. In companies as a whole, we find that growth depends positively on growth in the previous period and on debt, and depends negatively on size. When we subdivide the sample into small- and medium-sized companies and large companies, the results are similar to those obtained when we take companies as a whole. The differences concern the relationship between ownership control and growth, which is positive in the case of small- and medium-sized companies, and the non-influence of growth in the previous period on growth in the current period in the case of large companies.

Does Country Risk Influence International Tourism? A Dynamic Panel Data Analysis*

International tourism determinants have been studied in recent research, and focus has been given to estimation of demand equations. Country risk has been somewhat neglected in the analysis. Given adequate controls for price and income, we show that country risk is a robust and significant determinant of tourism specialisation of countries: a 1 per cent increase in country risk causes a 0.2 per cent fall in tourism specialisation. Policy-makers should be aware of the negative effect country risk has in tourism, as this is seen as one of the most promising sectors for development.

Are financing decisions of family-owned SMEs different? Empirical evidence using panel data

This paper analyses if ownership structure is an important determinant of capital structure decisions, on the basis of two sub-samples of family-owned and non-family owned SMEs, and using panel data models. The results suggest that family ownership is an important determinant for: i) the variations of short and long-term debt stimulated by financial deficit; ii) the speed of adjustment of short and long-term debt towards the respective target levels; and iii) the relationships between determinants and short-term debt and long-term debt. In general, the capital structure decisions of family-owned SMEs are closer to what is forecast by trade-off theory than those of non-family owned SMEs, whereas the capital structure decisions of non-family owned SMEs are closer to the forecasts of pecking order theory than those of family-owned SMEs.

Sources of finance for R&D investment: Empirical evidence from Portuguese SMEs using dynamic estimators

Abstract This paper makes two specific contributions to the SME literature: (i) it is pioneering in using the two-step estimation method, considering SME R&D intensity as dependent variable and cash flow, short and long-term debt and government subsidies as determinants; and (ii) the empirical evidence obtained allows us make important empirical contributions. Cash flow and short-term debt, regardless of the respective level, influence positively R&D intensity by SMEs. Secondly, long-term debt and government subsidies are only important for increased R&D intensity for higher levels of long-term debt and government subsidies. The multiple empirical evidence obtained in this study allows us to make important suggestions to policy-makers, as well as to SME managers/owners.

Firms' growth opportunities and profitability: a nonlinear relationship

Using different panel estimators, this article shows that the relationship between growth opportunities and profitability is nonlinear in a sample of firms in the Portuguese Stock Market. These results highlight that firms with low and high growth opportunities tend to show high profitability and firms in the middle of the growth opportunities distribution have small profitability. These suggest that the agency problems between managers and owners are particularly relevant in firms with middle growth opportunities, as managers seem to act in order to simultaneously grow and decrease profitability.