Roberto J. Santillán Salgado

Strategic alliances in emerging Latin America: a view from Brazilian, Chilean, and Mexican companies

Brazil, Chile, and Mexico constitute the leading newly industrialized countries (NICs) of Latin America. It is within these markets that the world expects significant economic gains over the next decade. Local companies in these countries are allying with foreign companies to enhance their competitive positions, yet little is understood about such interfirm collaboration with partners from these Latin American countries. Our study examines the strategic objectives of these Latin American companies, partnership structures, and their satisfaction in collaborating with companies from developed countries. Although existing studies have historically examined the dyad of strategic alliances from a perspective of developed countries (e.g., the U.S.), our study explores the issue from a perspective of companies in emerging Latin American economies.

Modeling the risk-return characteristics of the SB1 Mexican private pension fund index

This paper analyzes the returns and variance behavior of the largest specialized private pension investment funds index in Mexico, the SIEFORE Básica 1 (or, SB1). The analysis was carried out with time series techniques to model the returns and volatility of the SB1, using publicly available historical data for SB1. Like many standard financial time series, the SB1 returns show non-normality, volatility clusters and excess kurtosis. The econometric characteristics of the series were initially modeled using three GARCH family models: GARCH (1,1), TGARCH and IGARCH. However, due to the presence of highly persistent volatility, the series modeling was extended using Fractionally Integrated GARCH (FIGARCH) methods. To that end, an extended specification: an ARFIMA (p,d,q) and a FIGARCH model were incorporated. The evidence obtained suggests the presence of long memory effects both in the returns and the volatility of the SB1. Our analysis’ results have important implications for the risk management of the SB1.

A Dominant Firm's Strategy and Its Effect on the Capital Structure of Non‐Dominant Firms in the Self‐Service Discount Stores Industry

In an industry characterized by oligopolistic market structures there are generally firms that have enough market power as to influence the pricing and output decisions of all participants, forcing others to follow the strategies followed by the dominant firm(s) with very little opportunity to do otherwise. When a dominant firm is part of a larger corporation, which gives it the financial capacity to support an above‐average, long‐term investment, as a logical reaction to protect (or minimize the loss of market share), the rest of the participants in the industry are expected to also make an attempt to increase their investments, fundamentally affecting the long‐term capital structure strategy. This work’s contribution consists on presenting an empirical analysis of the capital structure decisions of the non‐dominant firms in the Self‐Service Discount Stores Industry (SSDSI) that result from the rapid expansion of Wal‐Mart in the Mexican market.