Search results

This paper reports the results of an empirical study of the determinants of capital structure of large Latin American companies. Variations with regard to the country, industry, and size of a company are examined for a sample of two hundred and thirty large companies located in twentytwo Latin American countries. This study is the first to examine the capital structures of this large set of Latin American companies. The results of this study indicate that while size does not seem to be significant, both country and industry are significant determinants of capital structure in Latin America not only in bivariate tests but also in multivariate statistical tests. Multinational and diversified companies, therefore, cannot assume uniformity of capital structure across countries and industries in Latin America and, they must take these differences into account in developing and setting capital structure, financing, evaluation, and management policies for their subsidiaries.

The financial analysis of international investment decisions is complex. The basic methodology which homes in on incremental cash flows needs to be refined in order to focus upon cash flows which are remittable to the parent company, for it is only these that would logically add shareholder value. Build in the complications of two lots of tax and changing exchange rates and the equation looks anything but simple. But there is another complexity too which renders the traditional discounting methodology less than wholly appropriate. And this applies not just to international investment but to any situation where capital is committed with an option to expand or curtail embedded in it. This is not to say that the typical model cannot be adapted to meet the situation. It can and it is not too difficult.

This study attempts to determine whether the level and volatility of interest rates affect the equity returns of commercial banks. Short‐term, intermediate‐term, and long‐term interest rates are used. Volatility is defined as the conditional variance of respective interest rates and is generated by using the ARCH estimation procedure. Two sets of models are estimated. The basic models attempt to determine the effect of contemporaneous and lagged interest rate volatility on bank equity returns, while the extended models incorporate additional contemporaneous macroeconomic variables. Contemporaneous interest rate volatility has little explanatory power, while lagged volatilities do possess some explanatory power, with the lag length varying depending on the interest rate series used and the time period examined. The results from the extended model suggest that the long‐term interest rate affects bank equity returns more adversely than the short‐term or the intermediate‐term interest rates. The findings establish the relevance of incorporating macroeconomic variables and their volatilities in models determining bank equity returns.

Terrorism, an important component of Political risk as a possible determinant of ADRs (American Depository Receipts) returns have received little attention in academic literature. To address this issue and examine whether political risk is a major determinant of ADR returns of emerging market countries, this paper empirically examines market valuation of Indian ADRs around acts of terrorism. Using a sample of 52 such events in the sample period Jan 2003‐Dec 2003 we empirically analyze returns of Indian ADRs. The results from our study indicate a marginally negative significant effect, failing to indicate that event of terrorist attacks severely affect the Indian ADRs listed on the US stock market. This may be explained by a combined effect of; (a) the optimism of US investors towards emerging markets, and (b) market participants becoming more resilient and making informed choices around the “general” events of terrorism.

The purpose of this paper is to compare and contrast the structure, regulation, and performance of banks in the EU and G‐10 countries. This enables one to identify any significant differences in the structure of banking in the nineteen separate countries comprising these two groups. The regulatory, supervisory, and deposit‐insurance environment in which banks operate in each of these countries is also compared and contrasted. This enables one to identify any significant differences in the regulatory environment that may help explain the structure of banking in the various countries. Beyond this, the effect of the overall structural and regulatory environment on individual bank performance is investigated in order to evaluate the appropriateness of existing regulations in individual countries and any proposals for reforming them. Hence, an exploratory empirical analysis based upon a sample of banks in the different countries is conducted to assess the effect of the different “regulatory regimes” on the performance of individual banks, controlling for various bank‐specific and country‐specific factors that may also affect bank performance. In this way, the paper attempts to contribute to an assessment of the appropriate balance between market and regulatory discipline to ensure that banks have sufficient opportunities to compete prudently and profitability in a competitive and global financial marketplace. In the process of conducting such an assessment, the paper necessarily provides information as to whether the U.S. is “out‐of‐step” with banking developments in other industrial countries.

Determinants of Electric Utility Betas. One important aspect of utility regulation is the estimation of cost of equity capital of the firm. Several techniques have been used to estimate the cost of equity, including the discounted cash flow model and the capital asset pricing model (CAPM). CAPM has its foundations in modern portfolio theory and its application has generated a lot of controversy — both from academia and the professional world. Much of the problem in using CAPM in utility rate cases has centered on the issue of estimating the beta coefficient. Myers (1972) points out that problems exist in the following areas: measurement of beta; stability of beta; and incomplete description of risk and return by CAPM. There is evidence to believe that CAPM is still widely used be expert witnesses to explain risk‐return relationships in utility rate cases (Cooley, 1980).

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

This paper aims to investigate the responses of laminated glass under soft body impact, including elastic impact and fracture/fragmentation consideration.

The simulation uses the combined finite-discrete element method (FDEM) which combines finite element mesh into discrete elements, enabling the accurate prediction of contact force and deformation. Material rupture is modelled with a cohesive fracture criterion, evaluating the process from continua to discontinua.

Responses of laminated glass under soft impact (both elastic and fracture) agree well with known data. Crack initiation time in laminated glass increases with the increase of the outside glass thickness. With the increase of Eprojectile, failure mode is changing from flexural to shear, and damage tends to propagate longitudinally when the contact surface increases. Results show that the FDEM is capable of modelling soft impact behaviour of laminated glass successfully.

The work is done in 2D, and it will not represent fully the 3D mechanisms.

Elastic and fracture behaviour of laminated glass under soft impact is simulated using the 2D FDEM. Limited work has been done on soft impact of laminated glass with FDEM, and special research endeavours are warranted. Benchmark examples and discussions are provided for future research.

Shalit and Yitzhaki presented the mean‐extended Gini (MEG) as a workable alternative to the Markowitz mean‐variance approach in 1984. Since then, the challenge has been to extend the MEG approach. The purpose of this paper is to propose a generalization of the MEG approach for making customized optimal asset allocation to control both down‐performance and/or up‐performance.

The MEG approach is used to make strategical allocation tailored to the investor risk aversion and gain propensity measured by characteristic parameters of the extended Gini measures.

The authors set up two optimization problems: the former focused on controlling the risk, the latter on emphasizing the potential gains. Sufficient conditions such that the efficient MEG‐risk frontier coincides with the inefficient MEG‐gain frontier are stated. In the realistic scenarios that portfolios have asymmetrical distributions and/or the investor profile is very conservative or very aggressive, the desirable occurrence that a portfolio is optimal under both optimizations may occur.

The main contribution of this research is to have pointed out that optimal allocation must be tailored to both the investor's risk and gain profile; and, that the optimality may be not preserved if the investor's risk‐gain profile changes. So, the statement “optimal allocation” should be reworded as “optimal allocation personalized to the investor's risk‐aversion and gain‐propensity”.