Theory and practice of corporate finance: Evidence and distinctive features in Latin America

Maquieira, Carlos; Preve, Lorenzo A.; Sarria-Allende, Virginia

doi:10.1016/j.ememar.2011.11.001

Cited by 63 publications

(82 citation statements)

References 25 publications

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“…For the Latin American case, firms seem to follow a pecking order in financing, with the IPO as the last source (Céspedes, González, & Molina, 2010;Maquieira, Preve, & Sarria-Allende, 2012). In the nineties, the region was characterized by high information asymmetries, high transaction costs, and high ownership concentration.…”

Section: Theoretical Framework and Hypothesis Developmentmentioning

confidence: 99%

Governance, sentiment analysis, and initial public offering underpricing

González

Guzmán²,

Tellez‐Falla

et al. 2019

Corporate Governance

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Research Question/Issue: What is the relationship between governance, tone in language, and underpricing of initial public offerings (IPOs) in Latin America?Research Findings/Insights: We find a positive (negative) and statistically significant relationship between board size (board independence) and IPO underpricing at the time firms go public. But more importantly, when interacting with corporate governance variables at the firm level, uncertainty in tone still shows statistical significance, which suggests that tone in communications matters for underpricing independently of governance provisions at the firm level.Theoretical/Academic Implications: Bigger boards seem to lead to greater underpricing, whereas more independent boards mitigate it. This finding stresses the relevance of functional convergence in regions with weak institutions such as Latin America. Our results also suggest that tone matters for underpricing even in firms with good governance practices. We argue that tone in corporate communications is a strong signaling mechanism for market participants.Practitioner/Policy Implications: Our results suggest that tone in firms' communications is relevant for market valuation. In the context of family firms in an underresearched context such as Latin America, we show that reputation effect is priced by the market valuation of the IPO.

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Section: Theoretical Framework and Hypothesis Developmentmentioning

confidence: 99%

Governance, sentiment analysis, and initial public offering underpricing

González

Guzmán²,

Tellez‐Falla

et al. 2019

Corporate Governance

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“…De acuerdo con la literatura previa, se introdujo en estos modelos una serie de variables de control que potencialmente incidan sobre la decisión de financiamiento (Frank y Goyal, 2009;Azofra y Rodríguez, 2012;Harris y Raviv, 1991;Maquieira et al, 2007;Titman y Wessels, 1988;Saona y San Martin, 2014;Espinosa et al, 2012;Céspedes et al, 2010;De Jong et al, 2008; Jara-Bertin y Sánchez, 2012; Jara-Bertin et al, 2012; Jara-Bertin et al, 2014), tales como la madurez de los activos (ASMAT) medida como la razón de activos no corrientes sobre gastos de depreciación, el tamaño (SIZE) medido como el logaritmo natural del total de activos, y la tangibilidad de los activos (TANG) que es medida como la razón entre activos tangibles sobre el total de activos. Por su parte, ROA representa la rentabilidad sobre los activos y se encuentra medida como la utilidad antes de ítems extraordinarios sobre el total de activos, el ratio de valor de mercado sobre el valor libre (MTB) como medida de oportunidades de crecimiento y, finalmente, LNAGE representa el logaritmo natural de la edad de la empresa.…”

Section: Variablesunclassified

Influencia de los inversionistas institucionales en las decisiones de estructura de capital de la empresa. Evidencia para un mercado emergente

et al. 2015

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Este artículo analiza empíricamente la influencia de las Administradoras de Fondos de Pensión (AFP) como principales accionistas institucionales, sobre las decisiones de estructura de capital de la empresa chilena. Estos inversionistas pueden influir en la estructura de capital mediante distintos papeles como los de monitoreo a la gestión y de recopilación y transferencia de información al mercado. El análisis es desarrollado durante el periodo 2009-2011 para una muestra de 109 empresas chilenas que cotizan en la bolsa. Las AFP no sólo participan en el mercado accionario sino que también compiten por la deuda pública, por lo que nuestros resultados son relevantes al indicar la positiva influencia de este tipo de inversionistas en la contratación y emisión de deuda, particularmente la pública

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“…Almost all the research carried out during the last two decades adopted limited methodological aspects. For example, cross sectional research design, case study and some form of qualitative study were more popular (e.g., Butler et al, 1993;Verbeeten, 2006;Hermes, Smid and Yao, 2007;Maquieira , Preve and Allende, 2012). However, in modern world, some form of event study methodology would be seminal for providing greater insights into capital budgeting practices.…”

Section: Answering To the Research Questions: Summary Of The Findingsmentioning

confidence: 99%

“…However, all most all the firms in developed and developing countries inclined to use sophisticated capital budgeting methods along with many capital budgeting tools for incorporating risk (i.e., sensitivity analysis, real options) and sophisticated discounted rate (i.e., Weighted Average Cost of Capital, Cost of Debt, CAPM) (e.g., Arnold and Hatzopoulos, 2000;Graham and Harvey, 2001;Ryan and Ryan, 2002;Cooper et al, 2002;Brounen ,deJong and Koedijk, 2004;Hermes, Smid, and Yao, 2007;Bennouna, Meredith and Marchant, 2010;Maquieira , Preve and Allende, 2012).…”

Section: Disparities Between Capital Budgeting Theory and Practicesmentioning

confidence: 99%

Capital Budgeting Theory and Practice: A Review and Agenda for Future Research

Kengatharan¹

2016

AEF

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Purpose -The main purpose of this research was to delineate unearth lacunae in the extant capital budgeting theory and practice during the last two decades and ipso facto become springboard for future scholarships. Design/methodology/approach -Web of science search and iCat search were used to locate research papers published during the last twenty years. Four criteria have been applied in selection of research papers: be an empirical study, published in English language, appeared in peer reviewed journal and full text research papers. These papers were collected from multiple databases including OneFile (GALE), SciVerse ScienceDirect (Elsevier), Informa -Taylor & Francis (CrossRef), Wiley (CrossRef), Business (JSTOR), Arts & Sciences (JSTOR), Proquest ,MEDLINE (NLM), and Wiley Online Library. Search parameters covered capital budgeting, capital budgeting decision, capital budgeting theory, capital budgeting practices, capital budgeting methods, capital budgeting models, capital budgeting tools, capital budgeting techniques, capital budgeting process and investment decision. Thematic text analyses have been explored to analyses them. Findings -Recent studies lent credence on the use of more sophisticated capital budgeting methods along with many capital budgeting tools for incorporating risk. Notwithstanding, it drew a distinction between developed and developing countries. Moreover, factors impinging on choice of capital budgeting practice were identified, and bereft of behavioural finance and event study methodological approach were highlighted. More extensive studies are imperative to build robust knowledge of capital budgeting theory and practice in the chaotic environment. Policy recommendation -This research was well thought out in its design and contributed by stating the known and unknown arena of capital budgeting during the last two decades. This scholarship facilitates to academics, practitioners, policy makers, and stakeholders of the company Limitations -Limitations of this study were primarily concerned with Tower of Babel Bias and time constraint. Keywords: Capital budgeting theory and practices, capital budgeting tools for incorporating risk, discount rate Paper type: Literature review Introduction Predominantly, area of capital and capital budgeting of financial management have been attracted many researchers during the last five decades and the seminal studies culminated with presenting many theories (e.g.,

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Theory and practice of corporate finance: Evidence and distinctive features in Latin America

Cited by 63 publications

References 25 publications

Governance, sentiment analysis, and initial public offering underpricing

Governance, sentiment analysis, and initial public offering underpricing

Influencia de los inversionistas institucionales en las decisiones de estructura de capital de la empresa. Evidencia para un mercado emergente

Capital Budgeting Theory and Practice: A Review and Agenda for Future Research

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