Walter Lee Ness

Reducing government bank presence in the Brazilian financial system Why and how

Abstract This paper examines the motives for government banking in Brazil. The dependency of the government financial institutions for financial support on the Federal Government are shown to have created loopholes that have made problematic the execution of monetary policy. The recent Federal Government program to reduce the presence of state financial institutions in the financial system is described and examined. The linkage of this program to the renegotiation of state government debt to the Federal Government under subsidized conditions is found to have been critical to state government acceptance of the privatization, extinction, transformation, and restructuring of state government financial institutions.

Previdência Social: fatores que explicam os resultados financeiros

This article presents a set of factors that explain the financial results of the General Social Security Regime in Brazil, focusing on revenue, benefit and global results. To test the findings encountered in the literature, monthly time series of the selected factors were used in addition to revenues, benefits and the global financial result covering the period from 1995 to 2006. The results confirmed the influence of demographic factors, minimum wages, salaries, informal labor and unemployment on revenues, benefits and the global financial result of the GSSR.

The Relationship between Governance and Sustainable Development

This paper presents a methodological approach to evaluating the relationship between governance and several variables commonly related to the concept of sustainable development and, also, related to financial indicators from various countries. We explore the theoretical framework linking the level of governance of the countries with their economic performance. Our sample incorporates data from developed and emergent countries, collected by the World Bank and Transparency International, in order to assess the significance of governance impact among countries with distinct degrees of development. Multiple regression analysis and panel data modeling were used to explore statistical relations amongst variables. Results show a positive relation between levels of governance and economic development, besides illustrating other significant issues.

Governance and risk of Brazilian publicly traded companies

This study estimates the relations between the governance practiced by a significant sample of Brazilian publicly listed companies and the risk of them. Local beta, the beta obtained using the S&P 500, share price volatility, idiosyncratic risk and the weighted average cost of capital were used to express their risk. The study confirmed that better governance were associated with lower risk. The structural equations results confirmed the linear regressions results. The endogeneity observed did not invalidate the results. The evidence predominately showed that the direction of causality runs from governance to the risk variables and not vice-versa.

CO 2 emissions, energy use and country governance

The purpose of this study is to investigate for selected countries, the possibility of relationships among CO2 emissions, the use of energy, and an aspect of the governance of countries. This investigation is based on a sample of data composed of variables from 54 countries, from 2000 to 2008, available at the World Bank website. The methods of analysis that were employed included linear regression with panel data and the method of structural equations for a robustness test. The results of the two models converged and showed the existence of statistically significant relationships: a) between CO2 emissions and that aspect of governance; b) between the use of energy and electricity and the same aspect of governance.

Corruption, governance and sustainable development

This paper presents a methodology for evaluating the relationship between governance and several variables commonly related to the concept of sustainable development, using financial indicators for control. We explore the theoretical framework linking the level of governance of the countries with their performance. Our sample incorporates data from developed and emergent countries, collected from the World Bank and Transparency International, to assess the significance of governance impact among countries with distinct degrees of development. Multiple regression analysis and panel data modelling were used to explore statistical relations amongst variables. Results show a positive relation between levels of governance and economic development, aside from illustrating other significant issues.

The Impact of Best Practices of Sustainability on Quality of Management: An Investigation at Brazilian Capital Markets

The study of the relationship between best practices of sustainability and quality of management investigates one of the most relevant and topical issues involving researchers and professionals. For this investigation, a representative sample of 205 Brazilian companies was selected, covering the period from 2005 to 2009 to test for a possible relationship between participation in a sustainability index, an indicator of best practices of sustainability and indicators of the quality of management. After applying different econometric methods, it was possible to confirm the hypothesis that best practices of sustainability are associated with better performance, less risk and higher market value. Moreover, best practices of sustainability impact the value of companies directly and indirectly through the mediating variables of performance and risk. Finally, possible determinants of the quality of practices of sustainability are associated (1) with market values in a positive way and (2) with operating leverage, return on assets (ROA) and volatility in a negative way.

Direct and indirect impacts of governance on the value of Brazilian corporations

This study estimated the quality of governance practices employed by a sample of publicly traded companies in Brazil between 2002 and 2006. It also explored the way quality of governance is related to three variables: risk, performance, and value. The Hausman test showed endogeneity between governance and value. Afterwards, the structural equations method was applied to construct various models involving the relationships among: a) governance; b) performance as measured by ROE (return on assets) and by ETS (ebit-to-sales); c) risk as measured by WACC (weighted average cost of capital); d) value as measured by MTS (market-to-book sales); e) by MTBV (market-to-book value). Statistically significant results were observed among high levels of governance, low risk, strong performance and high value. This suggests that governance affects the value of companies directly as well as affecting the value of companies indirectly through the mediating variables of risk and of performance.

The preference of private stock subscriptions in Brazil

Este artigo investiga a preferencia de empresas brasileiras nao financeiras por emissoes particulares de acoes ou por emissoes publicas no periodo de 1995 a 2002. Apresenta-se evidencia estatistica descritiva, e em seguida sao desenvolvidos modelos de analise discriminante multipla e de regressao logistica. Os resultados apontam maior propensao a emissao privada de acoes por empresas com menor rentabilidade ou maiores prejuizos, que realizaram emissoes de menor porte, apresentam maior concentracao de propriedade, maior endividamento, menor liquidez por negocio em Bolsa de Valores, e empresas estatais ou holdings.This article investigates the preference of non-financial Brazilian firms for public issues or private placements of equity as a source of capital from 1995 to 2002. Empirical evidence is presented by means of descriptive statistics, followed by the development of Multiple Discriminant Analysis and Logistic Regression models. The results reveal greater propensity to use private issues for firms with lower returns on equity and profits, smaller issues, high control concentration, more debt, less liquid stocks; and for holding and State-owned companies.

La preferencia por subscripciones privadas de acciones en el Brasil

Este artigo investiga a preferencia de empresas brasileiras nao financeiras por emissoes particulares de acoes ou por emissoes publicas no periodo de 1995 a 2002. Apresenta-se evidencia estatistica descritiva, e em seguida sao desenvolvidos modelos de analise discriminante multipla e de regressao logistica. Os resultados apontam maior propensao a emissao privada de acoes por empresas com menor rentabilidade ou maiores prejuizos, que realizaram emissoes de menor porte, apresentam maior concentracao de propriedade, maior endividamento, menor liquidez por negocio em Bolsa de Valores, e empresas estatais ou holdings.This article investigates the preference of non-financial Brazilian firms for public issues or private placements of equity as a source of capital from 1995 to 2002. Empirical evidence is presented by means of descriptive statistics, followed by the development of Multiple Discriminant Analysis and Logistic Regression models. The results reveal greater propensity to use private issues for firms with lower returns on equity and profits, smaller issues, high control concentration, more debt, less liquid stocks; and for holding and State-owned companies.