Wilson Toshiro Nakamura

What Determines the Capital Structure of the Largest Brazilian Firms? An Empirical Analysis Using Panel Data

This paper sought to analyze some of the supposed determinants of capital structure of the largest Brazilian firms, in light of the Pecking Order theory and the Trade-Off theory, testing the empirical validity of these theories in the local scenario. The study is an adaptation of the paper developed by Gaud et al., (2005) in Switzerland, whose work served as a basis for the choice of some variables and of the econometric tests conducted, and uses the Panel Data methodology. Dynamic tests were carried out in addition to static tests, aiming to analyze the adjustment process of the capital structure over time, toward an assumed optimal target level. The tests were supplemented by analyses of variance. The results demonstrated that leverage is negatively related to the importance of tangible assets and to profitability, while it is positively related to business risk. They also demonstrated that foreign owned companies are more in debt than national firms. The analysis suggests that the Pecking Order theory is more consistent than the Trade-Off theory to explain the capital structure of the largest Brazilian firms. The dynamic analysis showed a slow adjustment process of the capital structure towards the target level, suggesting the existence of high adjustment costs and confirming the Pecking Order behavior of managers.

Evaluation of Contagion or Interdependence in the Financial Crises of Asia and Latin America, Considering the Macroeconomic Fundamentals

This article investigates the existence of contagion between countries on the basis of an analysis of returns for stock indices over the period 1994 to 2003. The econometrics methodology used is that of multivariate Generalized Autoregressive Conditional Heteroscedasticity (GARCH) family volatility models, particularly the Dynamic Conditional Correlation (DCC) models in the form proposed by Engle and Sheppard (2001). The returns were duly corrected for a series of country-specific fundamentals. The relevance of this procedure is highlighted in the literature by the work of Pesaran and Pick (2003). The results obtained in this article provide evidence favourable for the hypothesis of regional contagion in both Latin America and Asia. As a rule, contagion spread from the Asian crisis to Latin America, but not in the opposite direction.

Determinants of Capital Structure of Publicly-Traded Companies in Latin America: The Role of Institutional and Macroeconomics Factors

Recent researches have been evidenced that the specific factors of the countries, as environment legal, institutional and economical exercises influence in the capital structure of the companies of several developed. The present study investigates the determinants of capital structure using panel data, for a sample of 388 companies belonging to the seven larger economies of Latin America (Mexico, Brazil, Argentina, Chile and Peru), in the period between 2001 and 2006. Starting from six indicators of leverage ratio, it was evidenced that the firm-specific factors: current liquidity, profitability, market to book value and size presented the most significant results and the theory of Pecking order seems to be the one that best explains the obtained results. The results for the factors macroeconomic and institutional were not so robust, except for the variable GDP growth, and the least degree for proxies about relevance of the stock market, fiscal load and time of opening of a new business.

Determinants of Funding Sources of Capital – A Sectored Approach in Brazil

The study of sources of capital financing of companies has been the focus for researchers empirically test theories of capital structure. Identify an optimal capital structure (if any!) is no easy task, due to the dependence of several dynamic variables; temporal and sectored. So the consensus seems distant, representing an interesting field of study. The objective of this work is to analyze the variables determining the capital structure of Brazilian non-financial companies within sectored scopes, in the period 1998-2013, using the Brazilian Database (Macrodados Sistemas Gerenciais). To design such revision of the most robust theories related to the capital structure are Pecking Order Theory (POT) and Trade-Off Theory (TOT). This work innovates in addressing the segmented view of business performance. It was found that 55.6% of the variation can be explained by variables included in the model . With the fixed effects model with dummy variables and White’s robust correction, it appears that the various observations are statistically different across sectors. This finding reinforces the idea of the importance of the approach to the industry for the study of Capital Structure. Each sector has specific characteristics that lead to the composition of different sources of funding.