SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Cambini, Carlo; Rondi, Laura.

This paper examines the investment and financial decisions of a sample of 92 EU regulated utilities, taking into account key institutional features of EU public utilities, such as: a) regulation by agencies with various degrees of independence; b) partial ownership of the state in the regulated firm; and c) the government’s political orientation, which may ultimately influence the regulatory climate to be either more pro-firm or more pro-consumers. Our results show that regulatory independence matters for both investment and financial decisions. Investment increases under an Independent Regulatory Agency (IRA), while ownership has no effect. Leverage also increases when the IRA is in place, especially so if the regulated firm is privately controlled....

Identification of stochastic processes for an estimated icewine temperature hedging variable

Palavras-chave: Regulated Utilities; Investment; Capital Structure; Private and State Ownership; Regulatory Independence; Government’s Political Orientation; Financial Economics; G31; G32; L33; L51; L90.

Ano: 2010

URL: http://purl.umn.edu/91002

Cyr, Don; Kusy, Martin.

Weather derivatives are a relatively new form of financial security that can provide firms with the ability to hedge against the impact of weather related risks to their activities. Participants in the energy industry have employed standardized weather contracts trading on organized exchanges since 1999 and the interest in non-standardized contracts for specialized weather related risks is growing at an increasing rate. The purpose of this paper is to examine the potential use of weather derivatives to hedge against temperature related risks in Canadian ice wine production. Specifically we examine historical data for the Niagara region of the province of Ontario, Canada, the largest icewine producing region of the world, to determine an appropriate...

Tertiary education in Latvia today and tomorrow

Palavras-chave: Wine market; Weather derivatives; Weather hedging; Agribusiness; Agricultural Finance; Crop Production/Industries; Environmental Economics and Policy; G13; G32; Q14; Q51; Q54.

Ano: 2007

URL: http://purl.umn.edu/37298

Eglitis, Janis; Panina, Ludmila.

Tipo: Journal Article

Palavras-chave: Tertiary education; Scenarios; Regional development.; Teaching/Communication/Extension/Profession; G32.

Ano: 2010

URL: http://purl.umn.edu/94728

Polish banking system during the global financial crisis

The role of financing frictions in agricultural investment decisions: an analysis pre and post financial crisis

Wiszniowski, Edward.

Lasting for over a year the global crisis in financial markets, affected individual countries’ banking systems to a different degree. The present article discusses the phenomenon and its effects on the Polish banking system. The aim of the article is to present trends, the scale of the crisis and the current level of danger to stability of domestic financial market. The result of the research is a synthetic estimation of the level of the financial sector stability, taking into account the risks to solvency, liquidity, profitability, and quality loan portfolio and changes in deposits.

Tipo: Journal Article

Palavras-chave: Banking; Financial crisis; Financial stability.; Financial Economics; G32.

Ano: 2010

URL: http://purl.umn.edu/94635

O'Toole, Conor M.; Newman, Carol F.; Hennessy, Thia C..

This paper uses a fundamental Q model of investment to consider the role played by financing frictions in agricultural investment decisions, controlling econometrically for censoring, heterogeneity and errors-in-variables. Our findings suggest that farmer's investment decisions are not driven by market fundamentals. We find some evidence that debt overhang restricts investment but investment is not dependent on liquidity or internal funds. The role of financing frictions in determining investment decisions changes in the post-financial crisis period when debt overhang becomes a significant impediment to farm investment. The evidence suggests that farmers increasingly rely on internal liquidity to drive investment. Finally, we find no evidence that farmers...

Inheritance Law and Investment in Family Firms

Palavras-chave: Credit Constraints; Firm Level Investment; Tobin's Q; Debt; Agricultural Finance; G31; G32; F34.

Ano: 2011

URL: http://purl.umn.edu/114568

Panunzi, Fausto; Ellul, Andrew; Pagano, Marco.

Entrepreneurs may be constrained by the law to bequeath a minimal stake to non-controlling heirs. The size of this stake can reduce investment in family firms, by reducing the future income they can pledge to external financiers. Using a purpose-built indicator of the permissiveness of inheritance law and data for 10,245 firms from 32 countries over the 1990-2006 interval, we find that stricter inheritance law is associated with lower investment in family firms, while it leaves investment unaffected in non-family firms. Moreover, as predicted by the model, inheritance law affects investment only in family firms that experience a succession.

Palavras-chave: Succession; Family Firms; Inheritance Law; Growth; Investment; Financial Economics; G32.

Ano: 2009

URL: http://purl.umn.edu/50330

A Theory of Firm Decline

Gian Luca, Clementi; Cooley, Thomas; Di Giannatale, Sonia.

We study the problem of an investor that buys an equity stake in an entrepreneurial venture, under the assumption that the former cannot monitor the latter’s operations. The dynamics implied by the optimal incentive scheme is rich and quite different from that induced by other models of repeated moral hazard. In particular, our framework generates a rationale for firm decline. As young firms accumulate capital, the claims of both investor (outside equity) and entrepreneur (inside equity) increase. At some juncture, however, even as the latter keeps on growing, invested capital and firm value start declining and so does the value of outside equity. The reason is that incentive provision is costlier the wealthier the entrepreneur (the greater is inside...

Capital Structure and Regulation: Does Ownership Matter?

Palavras-chave: Principal Agent; Moral Hazard; Hidden Action; Incentives; Survival; Firm Dynamics; Financial Economics; D82; D86; D92; G32.

Ano: 2010

URL: http://purl.umn.edu/92788

Bortolotti, Bernardo; Cambini, Carlo; Rondi, Laura; Spiegel, Yossi.

We construct a comprehensive panel data of 96 publicly traded European utilities over the period 1994-2005 in order to study the relationship between the capital structure of regulated firms, regulated prices, and investments, and examine if and how this interaction is affected by ownership structure. We show that firms in our sample increase their leverage after becoming regulated by an independent regulatory agency, but only if they are privately controlled. Moreover, we find that the leverage of these firms has a positive and significant effect on regulated prices, but not vice versa, and it also has a positive and significant effect on their investment levels. Our results are consistent with the theory that privately-controlled firms use leverage...

Stress testing as a tool for simulating the effects of crisis in banks

Palavras-chave: Regulated utilities; Regulatory agencies; Capital structure; Leverage; Investment; Private and state ownership; Public Economics; L51; G31; G32; L33.

Ano: 2007

URL: http://purl.umn.edu/7449

The structure of the total capital requirement after the implementation of Capital Requirements Directive in the Polish banking system

Wiszniowski, Edward.

Emergence of crisis in financial markets, especially banks, have forced a change in approach to risk management. It has become necessary to develop new or refine existing models of early bankruptcy threat warning, as well as establishing the potential impact of bank failures. One of the tools, indicating that resistance to the phenomenon of crisis is “stress testing”. Its aim, at least in the case of banks, is concerned with estimating the level of economic resistance towards the occurring risk. Some of these risks are: the non-payment of loans due to deterioration in the economic situation of a country, fluctuations in interest rates, exchange rates and a fall in prices of securities which are traded on stock exchanges. This article discusses the nature...

Tipo: Journal Article

Palavras-chave: Banking; Banking risks; Risk management; Financial crisis; Financial Economics; G32.

Ano: 2010

URL: http://purl.umn.edu/95941

THE CONSEQUENCE OF FINANCIAL CRISES IN ALBANIAN INSURANCE MARKET

Wiszniowski, Edward.

One of the key elements of effective financial banking management is the ability to quickly identify and determine the degree of risk a bank faces as a result of hazardous actions it undertakes. The rules of the market research existing in the Polish banking system for more than two years are based on regulations adopted by the European Parliament. The present article discusses the risks and their significance in the total capital requirement when calculating the solvency ratio. The analysis of the period from June 2007 to June 2009 shows that credit risk and operational risk exert the greatest impact on the value of the bank solvency ratio.

Tipo: Journal Article

Palavras-chave: Banking; Banking risk; Risk management.; Financial Economics; G32.

Ano: 2009

URL: http://purl.umn.edu/94573

Madani, Filloreta; Cakrani, Edmira.

The Albanian insurance market is not influenced considerably from current financial crisis. Early yet phase of development with the very low penetration level explains steadiness of insurance market to exposure influence of global financial crisis. Another factor contributed to stability of insurance market is focusing insurance businesses more on the compulsory insurance segment which is not fully liberalized. Conservative investment policies of Albanian insurers also contributed to avoiding influence of market risks induced by world financial crisis.

Tipo: Journal Article

Palavras-chave: Insurance market; Non-life insurance; Compulsory insurance; Penetration coefficient.; Financial Economics; G22; G32.

Ano: 2010

URL: http://purl.umn.edu/92367

The Role of Bounded Rationality in Farm Financing Decisions – First Empirical Evidence –

Musshoff, Oliver; Hirschauer, Norbert; Wassmuss, Harm.

Farmers do not often change from their house bank to another bank, even if the competing banks offer better conditions. This “reluctance to switch” can be explained, on the one hand, by the transaction costs resulting from such a change of business relation. On the other hand, it may be the result of bounded rationality. The results of a survey of North German farmers show that they are indeed bounded rational borrowers. They greatly underestimate the monetary disadvantages which are caused by the higher interest rates for loans from their house bank. In other words: They do not switch bank even if their individually perceived transaction costs are already “covered” by the lower interest rates of the alternative loan offer.

Does Privatization Deliver? Access to Telephone Services and Household Income in Poor Rural Areas Using a Quasi-Natural Experiment for Peru

Palavras-chave: Financing behavior; Bounded rationality; Switching costs; Agricultural Finance; Farm Management; Financial Economics; Institutional and Behavioral Economics; Q12; G32; C91.

Ano: 2009

URL: http://purl.umn.edu/51545

Chong, Alberto E.; Galdo, Virgilio; Torero, Maximo.

We take advantage of a quasi-natural experiment in Peru by which the privatized telecommunications company was required by government to randomly install and operate public pay phones on small rural towns along the national territory. Using a especially designed household survey for a representative sample of rural towns we are able to link access to telephone services with household income. We find, that regardless of the income measurement, most characteristics of public telephone are positively linked with income. Remarkably, the benefits are given at both non-farm and farm income levels. Not only do the findings hold when using instrumental variables but they are further confirmed when using propensity scores matching methods.

Microfinance Institutions: Does Capital Structure Matter?

Palavras-chave: Privatization; Institutions; Rural; Poverty; Telecommunications; Consumer/Household Economics; G32; H10; J45; O1.

Ano: 2006

URL: http://purl.umn.edu/25691

Bogan, Vicki.

Microfinance Institutions (MFIs) have risen to the forefront as invaluable institutions in the development process. Nevertheless, capital constraints have hindered the expansion of microfinance programs such that the demand for financial services still far exceeds the currently available supply. Moreover, it is observed that microfinance organizations have had various degrees of sustainability. Thus, the question of how best to fund these programs is a key issue. Recognizing the potential of microfinance in the development process, this paper examines the existing sources of funding for MFIs by geographic region, and explores how changes in capital structure could facilitate future growth and improve the efficiency and financial sustainability of MFIs....

Análise dos determinantes do endividamento das empresas de capital aberto do agronegócio brasileiro

Palavras-chave: Microfinance Institutions; Capital structure; Financial Economics; F3; G21; G32; O1.

Ano: 2008

URL: http://purl.umn.edu/51125

Bressan, Valéria Gama Fully; Lima, Joao Eustaquio de; Bressan, Aureliano Angel; Braga, Marcelo Jose.

Studies involving capital structure and the identification of its determinants are relevant issues in the field of corporate finance management research. In this regard, the present study intends to evaluate the determinants of corporate leverage in the Brazilian agribusiness sector using the model of Rajan and Zingales (1995). In the definition of the sample there were selected 26 companies that are classified in one of three subdivisions of the Brazilian agribusiness sector: a) the agriculture or cattle raising; b) inputs or production factors and c) processing and distribution sector, using as reference the CNA classification. The study used data from the Economatica® database, with the adoption of panel data methods. The results indicated that the...

Tipo: Journal Article

Palavras-chave: Debt; Capital structure; Agribusiness; Pecking Order Theory.; Agribusiness; Environmental Economics and Policy; Q14; G32.

Ano: 2009

URL: http://purl.umn.edu/60816

Long Term Changes in Voting Power and Control Structure following the Unification of Dual Class Shares

Lauterbach, Beni; Yafeh, Yishay.

We follow the evolution of ownership structure in a sample of 80 Israeli companies that unified their dual-class shares in the 1990s, and compare it with a control sample of firms that maintained their dual share structure at least until 2000. Our main findings are as follows. First, controlling shareholders offset the dilution of voting rights they incurred upon unification by: 1) increasing their holdings prior to the unification (ex-ante preparation), and 2) by buying shares afterwards; by the end of the sample period their voting power was only marginally lower than in the control sample. This suggests that marginal voting rights are important to controlling shareholders even beyond the 50% threshold. Second, share unifications were not associated with...

Microfinance for Agricultural Firms- Credit Access and Loan Repayment in Tanzania

Palavras-chave: Dual Class Shares; Corporate Governance; Financial Economics; G30; G32.

Ano: 2009

URL: http://purl.umn.edu/55833

Weber, Ron; Musshoff, Oliver.

On the example of a commercial microfinance institution (MFI) in Tanzania this paper investigates first whether agricultural firms have a different probability to get a loan and whether their loans are differently volume rationed than loans to non-agricultural firms. Second, we analyze whether agricultural firms repay their loans with different delinquencies than non-agricultural firms. Our results reveal that agricultural firms face higher obstacles to get credit but as soon as they have access to credit, their loans are not differently volume rationed than those of non-agricultural firms. Furthermore, agricultural firms are less often delinquent when paying back their loans than non-agricultural firms. Our findings suggest that a higher risk exposition...

Tipo: Presentation

Palavras-chave: Agricultural Finance; Access to Credit; Loan Repayment; Microfinance Institutions; Financial Economics; International Development; Risk and Uncertainty; G21; G32; Q14.

Ano: 2012

URL: http://purl.umn.edu/122552

Sovereign Wealth Fund Investment Patterns and Performance

Bortolotti, Bernardo; Fotak, Veljko; Megginson, William; Miracky, William.

This study describes the newly created Monitor-FEEM Sovereign Wealth Fund Database and discusses the investment patterns and performance of 1,216 individual investments, worth over $357 billion, made by 35 sovereign wealth funds (SWFs) between January 1986 and September 2008. Approximately half of the investments we document occur after June 2005, reflecting a recent surge of SWF activity. We document large SWF investments in listed and unlisted equity, real estate, and private equity funds, with the bulk of investments being targeted in cross-border acquisitions of sizeable but non-controlling stakes in operating companies and commercial properties. The average (median) SWF investment is a $441 million ($55 million) acquisition of a 42.3% (26.2%) stake in...

Collaterals, Bank Monitoring and Performance: the Case of Newly Established Wine Farmers

Palavras-chave: Sovereign Wealth Funds; International Financial Markets; Government Policy and Regulation; Financial Economics; G32; G15; G38.

Ano: 2009

URL: http://purl.umn.edu/50407

Cadot, Julien.

This research aims at identifying the incentives associated to collaterals in an asymmetric information context and when the bank is the main financial partner of the entrepreneurs, which is typically the case for most farms and especially in the wine sector. In one hand, collaterals may reduce the risk of overinvestment by entrepreneurs and so reduce the risk of repayment default. In the other hand, to contract collaterals may lead the bank to reduce the monitoring effort. In this paper we test these two hypotheses in taking into account the fact that entrepreneurs can benefit from a banking relationship or not. Our results confirm that collaterals’ incentives depend on the bank monitoring. Moreover, this emphasizes the uniqueness of land mortgages....

The Deep-Pocket Effect of Internal Capital Markets

Palavras-chave: Collaterals; Incentives; Bank monitoring; Agricultural Finance; G32; G33; G35.

Ano: 2011

URL: http://purl.umn.edu/103414

Boutin, Xavier; Cestone, Giacinta; Fumagalli, Chiara; Pica, Giovanni; Serrano-Velarde, Nicolas.

This paper provides evidence that incumbents' access to group deep pockets has a negative impact on entry in product markets. Relying on a unique French data set on business groups, the paper presents three major findings. First, consistent with theoretical predictions, the amount of financial resources owned by incumbent-affiliated groups has a negative impact on entry in a market. This suggests that internal capital markets operate within corporate groups and that they have a potential anti-competitive effect. Second, the impact on entry of group financial strength is more important in markets where access to external funding is likely to be more difficult. Third, the more active are internal capital markets, the more pronounced the effect on entry of...