cometadata/datacite-titles-descriptions-related-identifiers huggingface dataset:
DOI: 10.6084/m9.figshare.20025523.v1
title: Composition of the board of directors and pay-performance sensitivity

description: ABSTRACT This article investigates, in the Brazilian capital market, the effect of the composition of the board of directors on executive compensation sensitivity to market performance, known as pay-performance sensitivity (PPS). Due to potential agency conflicts between controlling and minority shareholders and between shareholders and managers, members of the board of directors of the executive board or those appointed by the controlling shareholder might have less independence, something which may compromise monitoring effectiveness and, consequently, reduce the PPS. The purpose is contributing to understand the agency conflicts that have taken place in the Brazilian capital market and to define the configuration of the monitoring and compensation mechanisms that minimize total agency costs, maximizing shareholders’ wealth. The research results have implications for understanding the agency relations and for corporate governance in the Brazilian capital market. It is concluded that the relation between the monitoring exercised by the board of directors and executive compensation is a condition for its effectiveness as a governance mechanism in the Brazilian capital market. Data within the period 2013-2015 from 92 companies that participate in the Brazil 100 Index (IBRX 100) of the São Paulo Stock, Mercantile & Futures Exchange (BM&FBOVESPA) were analyzed. In addition to tests of difference between mean values and correlation, estimates were processed through feasible generalized least squares modeling. The independence of the board of directors vis-à-vis the controlling shareholder and the executive board may work as a corporate governance mechanism supplementing executive compensation. The results of this study indicate that the proportion of executives and independent members in the board of directors reduces the PPS, a measurement for executive compensation effectiveness made operational by the contemporary relation between increased managers’ compensation and increased company’s market value.
DOI: 10.6084/m9.figshare.20025524.v1
title: Impact of the Brazilian Accounting Pronouncements Committee’s New Guideline (OCPC 07) on the downsizing of companies’ Notes

description: ABSTRACT This article aims to assess the impact of the New Guideline of the Brazilian Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - OCPC 07) on improving formal features (size, readability, and specificity) of Brazilian companies’ Notes. OCPC 07 is one of the world’s first guidelines issued in response to the current demand for the downsizing of companies’ Notes, which according to standard setters and market agents have become too extensive, thus characterizing a disclosure overload. This is a unique study on the subject. The results suggest the effectiveness, although limited, of the new standard in promoting a departure from the habits of secrecy and formalism rooted in centuries of legal-accounting civil law tradition, and indicate that there is still room for complementary improvement initiatives in the form of incentives for firms and increased enforcement. Three complementary methodological approaches are used: (1) an analysis of both the evolution of note size after OCPC 07 and the factors explaining that size and its variation; (2) an examination of indicators of readability, conciseness, and specificity of the note on accounting policies; and (3) a size comparison of the Notes of Brazilian and British companies, a benchmark of the common law tradition. An average reduction of 10% in Note size was found two years after the introduction of Guideline (Orientação) 07 by the (OCPC 07). This downsizing was not generalized, but instead identified only among firms in the Novo Mercado and among those audited by two of the Big Four. Even in firms that reduced their notes by at least 20%, no significant improvements in readability levels could be perceived, nor in habits of copy-pasting the auditors’ templates, which could signal a focus on firms’ real practices in the note on accounting policies. Brazilian Notes remain far from the benchmark and are still 40% longer than British ones, despite an equivalent number of pages being expected.
DOI: 10.6084/m9.figshare.20025524
title: Impact of the Brazilian Accounting Pronouncements Committee’s New Guideline (OCPC 07) on the downsizing of companies’ Notes

description: ABSTRACT This article aims to assess the impact of the New Guideline of the Brazilian Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - OCPC 07) on improving formal features (size, readability, and specificity) of Brazilian companies’ Notes. OCPC 07 is one of the world’s first guidelines issued in response to the current demand for the downsizing of companies’ Notes, which according to standard setters and market agents have become too extensive, thus characterizing a disclosure overload. This is a unique study on the subject. The results suggest the effectiveness, although limited, of the new standard in promoting a departure from the habits of secrecy and formalism rooted in centuries of legal-accounting civil law tradition, and indicate that there is still room for complementary improvement initiatives in the form of incentives for firms and increased enforcement. Three complementary methodological approaches are used: (1) an analysis of both the evolution of note size after OCPC 07 and the factors explaining that size and its variation; (2) an examination of indicators of readability, conciseness, and specificity of the note on accounting policies; and (3) a size comparison of the Notes of Brazilian and British companies, a benchmark of the common law tradition. An average reduction of 10% in Note size was found two years after the introduction of Guideline (Orientação) 07 by the (OCPC 07). This downsizing was not generalized, but instead identified only among firms in the Novo Mercado and among those audited by two of the Big Four. Even in firms that reduced their notes by at least 20%, no significant improvements in readability levels could be perceived, nor in habits of copy-pasting the auditors’ templates, which could signal a focus on firms’ real practices in the note on accounting policies. Brazilian Notes remain far from the benchmark and are still 40% longer than British ones, despite an equivalent number of pages being expected.
DOI: 10.6084/m9.figshare.20025527
title: Bank revenue diversification: its impact on risk and return in Brazilian banks

description: ABSTRACT The present study aims to determine the impact of bank revenue diversification on Brazilian banks’ risk and return. This strategy has been adopted by banks in several countries, including Brazil. In 2003, noninterest income accounted for 17.80% of the operating revenue of the banks analyzed, and in 2014, this share increased to 27.40%. While many studies have addressed the subject in American, European and Asian banks, it still has not been approached in a sample of Brazilian banks. Since the banking industry is a key variable for the financial system’s stability, it is important to study the factors that affect banks’ risk and return. We analyzed the sample for the period from 2003 to 2014, using dynamic panel data GMM (Generalized Method of Moments) to address endogeneity, heteroscedasticity and autocorrelation problems. Our main results show that noninterest income has a major role in the performance of the banks studied; our analysis of financial intermediation activities showed that loan operations produced better results than trading. Moreover, confirming the hypotheses proposed, noninterest income showed a generally positive impact on return and risk adjusted return for the banks studied. However, against our expectation, noninterest income showed a positive relationship with the risk of these banks (although not statistically significant). It is worth highlighting the control variables, i.e., real interest rate, GDP and bank growth, which were relevant in determining bank performance.
DOI: 10.6084/m9.figshare.20025527.v1
title: Bank revenue diversification: its impact on risk and return in Brazilian banks

description: ABSTRACT The present study aims to determine the impact of bank revenue diversification on Brazilian banks’ risk and return. This strategy has been adopted by banks in several countries, including Brazil. In 2003, noninterest income accounted for 17.80% of the operating revenue of the banks analyzed, and in 2014, this share increased to 27.40%. While many studies have addressed the subject in American, European and Asian banks, it still has not been approached in a sample of Brazilian banks. Since the banking industry is a key variable for the financial system’s stability, it is important to study the factors that affect banks’ risk and return. We analyzed the sample for the period from 2003 to 2014, using dynamic panel data GMM (Generalized Method of Moments) to address endogeneity, heteroscedasticity and autocorrelation problems. Our main results show that noninterest income has a major role in the performance of the banks studied; our analysis of financial intermediation activities showed that loan operations produced better results than trading. Moreover, confirming the hypotheses proposed, noninterest income showed a generally positive impact on return and risk adjusted return for the banks studied. However, against our expectation, noninterest income showed a positive relationship with the risk of these banks (although not statistically significant). It is worth highlighting the control variables, i.e., real interest rate, GDP and bank growth, which were relevant in determining bank performance.
DOI: 10.6084/m9.figshare.20025529
title: Why do Latin American firms hold so much more cash than they used to?

description: Abstract This study assesses whether the trade-off or the pecking order theories explain the increased cash ratios in Latin American firms. It also assesses the explanatory power of additional variables that identify key macroeconomic features in Latin American economies. Due to its noticeable increase, cash became a key feature of Latin American firm performance over the last decades. The need for a better understanding is stressed by the fact that, during most of the last decade, these firms experienced a phase of accelerated economic growth and buoyant financial markets. The resulting surge in real investment opportunities within this period makes the growing cash holdings all the more puzzling. As far as we know, no other research addresses this issue in a direct way. There are robust facts about the increased cash holdings in Latin American firms. This article assesses traditional explanations and defines which fits more properly to the study sample. A complementary explanation regarding exchange rate exposure and key macroeconomic variables is constructed and empirically evaluated. To address potential sources of endogeneity, dynamic panel data methods are used. Particularly, the system generalized method of moments (GMM) was applied, as proposed by Blundell and Bond (1998). This article reports an increasing trend for corporate cash holdings in a sample of selected Latin American firms between 2000 and 2014. Likewise, net leverage and short-term debt show a declining trend over the same period. The trade-off theory may explain this. A substantial effect of macroeconomic variables particularly affecting firms that operate in the region is observed, such as exchange rate risks.
DOI: 10.6084/m9.figshare.20025529.v1
title: Why do Latin American firms hold so much more cash than they used to?

description: Abstract This study assesses whether the trade-off or the pecking order theories explain the increased cash ratios in Latin American firms. It also assesses the explanatory power of additional variables that identify key macroeconomic features in Latin American economies. Due to its noticeable increase, cash became a key feature of Latin American firm performance over the last decades. The need for a better understanding is stressed by the fact that, during most of the last decade, these firms experienced a phase of accelerated economic growth and buoyant financial markets. The resulting surge in real investment opportunities within this period makes the growing cash holdings all the more puzzling. As far as we know, no other research addresses this issue in a direct way. There are robust facts about the increased cash holdings in Latin American firms. This article assesses traditional explanations and defines which fits more properly to the study sample. A complementary explanation regarding exchange rate exposure and key macroeconomic variables is constructed and empirically evaluated. To address potential sources of endogeneity, dynamic panel data methods are used. Particularly, the system generalized method of moments (GMM) was applied, as proposed by Blundell and Bond (1998). This article reports an increasing trend for corporate cash holdings in a sample of selected Latin American firms between 2000 and 2014. Likewise, net leverage and short-term debt show a declining trend over the same period. The trade-off theory may explain this. A substantial effect of macroeconomic variables particularly affecting firms that operate in the region is observed, such as exchange rate risks.
DOI: 10.6084/m9.figshare.7418744
title: Misvaluation and behavioral bias in the Brazilian stock market

description: ABSTRACT The study sought to apply the model developed by Gokhale et al. (2015) to identify the existence of overreaction and behavioral biases in the Brazilian stock market and analyze its performance as an investment strategy on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBOVESPA) in the short term and long term, as well as test its robustness with time window simulations. The impacts of behavioral finance on capital markets can affect economic decisions, perpetuate or increase asset pricing anomalies, and in more extreme and persistent situations contribute to the formation of bubbles that can compromise the entire financial system of a country. The study pioneers an innovative methodology in the Brazilian stock market for identifying behavioral biases and obtaining abnormal returns and higher returns than the Ibovespa. The research uses the model developed by Gokhale, Tremblay, and Tremblay (2015) in three samples with quotations data for Brazilian publicly-traded companies that compose the Ibovespa and IBrA in the period from 2005 to 2016. With the R statistical software, the Fundamental Valuation Index (FVI) was calculated for each sample share and each year. From the FVI index, the undervalued shares were identified, indicating that the sales price does not reflect their economic fundamentals, and portfolio simulations were carried out for investment over three months or the next year. The results indicate the possible existence of overreaction and behavioral biases in the Brazilian stock market, which lead to the possibility of higher abnormal returns than those of the Ibovespa. Similar to the US market, at the end of the 2006-2016 period simulated portfolios yielded more than 274%, while the Ibovespa yielded approximately 80%. The robustness tests attest to the effectiveness of the model. The various investment portfolios, simulated over different time horizons, yielded more than the Ibovespa on average. The study also confirmed the assumptions of Gokhale, Tremblay, and Tremblay (2015) regarding the model's inadequacy for short-term strategies.
DOI: 10.6084/m9.figshare.7418744.v1
title: Misvaluation and behavioral bias in the Brazilian stock market

description: ABSTRACT The study sought to apply the model developed by Gokhale et al. (2015) to identify the existence of overreaction and behavioral biases in the Brazilian stock market and analyze its performance as an investment strategy on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBOVESPA) in the short term and long term, as well as test its robustness with time window simulations. The impacts of behavioral finance on capital markets can affect economic decisions, perpetuate or increase asset pricing anomalies, and in more extreme and persistent situations contribute to the formation of bubbles that can compromise the entire financial system of a country. The study pioneers an innovative methodology in the Brazilian stock market for identifying behavioral biases and obtaining abnormal returns and higher returns than the Ibovespa. The research uses the model developed by Gokhale, Tremblay, and Tremblay (2015) in three samples with quotations data for Brazilian publicly-traded companies that compose the Ibovespa and IBrA in the period from 2005 to 2016. With the R statistical software, the Fundamental Valuation Index (FVI) was calculated for each sample share and each year. From the FVI index, the undervalued shares were identified, indicating that the sales price does not reflect their economic fundamentals, and portfolio simulations were carried out for investment over three months or the next year. The results indicate the possible existence of overreaction and behavioral biases in the Brazilian stock market, which lead to the possibility of higher abnormal returns than those of the Ibovespa. Similar to the US market, at the end of the 2006-2016 period simulated portfolios yielded more than 274%, while the Ibovespa yielded approximately 80%. The robustness tests attest to the effectiveness of the model. The various investment portfolios, simulated over different time horizons, yielded more than the Ibovespa on average. The study also confirmed the assumptions of Gokhale, Tremblay, and Tremblay (2015) regarding the model's inadequacy for short-term strategies.
DOI: 10.6084/m9.figshare.7419569.v1
title: Do I win, does the company win, or do we both win? Moderate traits of the Dark Triad and profit maximization

description: ABSTRACT This article analyzes the relationship between the maximization of personal and company gains and the moderate traits of the Dark Triad. The relevance of choosing this topic lies in investigating the attitude of executives who exhibit characteristics of a moderate intensity between the strong and weak traits. It is proven that the vision and charisma of narcissistic individuals, the strategy and tactics of Machiavellian individuals, and the creativity and good strategic thinking of psychopathic individuals are differentiating characteristics that enhance successful and integrative leadership and that are far from the more accentuated and opportunistic attitudes related to the strong traits, whose practices involve dishonest actions for personal gain. This evidence creates the possibility for strengthening the research in the accounting area, especially on the behavioral approach, in order to promote its interface with psychology and clarify how personality, values, and experiences influence managers’ choices when conducting business and how workers and companies are impacted by these decisions. The study is empirical-theoretical and involves 263 managers, adopting a survey as its data collection strategy and applying a self-reporting type questionnaire. The data analysis approaches included descriptive statistics, correlations, tests of means, and logistic regressions. In this study, managers with moderate psychopathic traits showed a lower tendency to maximize profit by manipulating results. An opposite tendency was revealed for those with moderate Machiavellian traits. The combined effect of the three Dark Triad traits was significant and positive, revealing opportunistic profit maximization. These findings contribute to future studies that aim to systematically analyze moderate levels of the triad and corroborate the findings that have revealed the common characteristics of manipulation, callousness, and dishonesty when investigating the interactive effect between the traits in question.
DOI: 10.6084/m9.figshare.7419569
title: Do I win, does the company win, or do we both win? Moderate traits of the Dark Triad and profit maximization

description: ABSTRACT This article analyzes the relationship between the maximization of personal and company gains and the moderate traits of the Dark Triad. The relevance of choosing this topic lies in investigating the attitude of executives who exhibit characteristics of a moderate intensity between the strong and weak traits. It is proven that the vision and charisma of narcissistic individuals, the strategy and tactics of Machiavellian individuals, and the creativity and good strategic thinking of psychopathic individuals are differentiating characteristics that enhance successful and integrative leadership and that are far from the more accentuated and opportunistic attitudes related to the strong traits, whose practices involve dishonest actions for personal gain. This evidence creates the possibility for strengthening the research in the accounting area, especially on the behavioral approach, in order to promote its interface with psychology and clarify how personality, values, and experiences influence managers’ choices when conducting business and how workers and companies are impacted by these decisions. The study is empirical-theoretical and involves 263 managers, adopting a survey as its data collection strategy and applying a self-reporting type questionnaire. The data analysis approaches included descriptive statistics, correlations, tests of means, and logistic regressions. In this study, managers with moderate psychopathic traits showed a lower tendency to maximize profit by manipulating results. An opposite tendency was revealed for those with moderate Machiavellian traits. The combined effect of the three Dark Triad traits was significant and positive, revealing opportunistic profit maximization. These findings contribute to future studies that aim to systematically analyze moderate levels of the triad and corroborate the findings that have revealed the common characteristics of manipulation, callousness, and dishonesty when investigating the interactive effect between the traits in question.
DOI: 10.6084/m9.figshare.20025530
title: Underreaction to open market share repurchases,

description: ABSTRACT This article aims to investigate the long-term performance of a portfolio of firms that announced the repurchase of their own stocks in the Brazilian market from 2003 to 2014. Open market stock repurchase is a means to distribute cashflow to shareholders. Some of the reasons for a firm to buy back its own stocks are: to adjust its capital structure; to reduce excessive cash levels; as an alternative to dividends; and signaling to the market in order to reduce information asymmetry between the firm and its investors. If the signaling hypothesis is true, then forming a portfolio with shares that announce repurchases generates abnormal returns in the long run. Our results show that repurchase announcements in the open market signal stock underpricing, and abnormal returns can be earned using this strategy. Results are inconsistent with the semi-strong form of the efficient markets hypothesis, which states that one cannot earn abnormal returns with publicly available information. We obtained abnormal returns using the capital asset pricing model (CAPM) and Fama and French three-factor model. Additionally, we divided the sample in growth and value firms. We found that the average abnormal return for firms that announce repurchase programs ranges from 5.4% to 7.9% for up to a 3-year period after the announcement. For value companies (more likely to repurchase stocks due to undervaluation), abnormal returns can reach up to 11.5% per year.