Abstract
Growing investment in information technology applications creates a need to understand the proper integration of these tools into strategic decision making of the firm. This study discusses the impact of global information and communication technologies on competitiveness and performance of Brazilian trading companies. Using resource based theory as a starting point, we examine how information technology, as an internal resource, can provide competitive advantage and what impact information technology produces on competitiveness of Brazilian export intermediaries. The study implements a replicable model (CAPITA) developed by Sethi and King (1994), to investigate these relationships in the emerging market of Brazil. The empirical findings reveal that superior export performance depends on the ability of managers to interpret and utilize some CAPITA dimensions that have a strong relationship with the trading company’s performance. The results corroborate previous research confirming that information technology application has a strong impact on performance. This research extends previous work on this topic within the North American hemisphere, to the South American hemisphere. The development of a strong network of export intermediaries in the emerging market of Brazil can be enhanced by a better understanding of the impact of technology applications, and corresponding government policies endorsing growth.
Highlights
One of the most important steps in the process of valuing companies, mainly those listed on stock exchanges, is to measure their cost of equity capital
In order to compare the methods for estimating this variable, this work investigates whether there are statistically significant differences among the equity capital costs estimated for Brazilian companies through the following models: i) Gordon model; ii) capital asset pricing model (CAPM); iii) arbitrage pricing model (APM); and iv) Ohlson-Juettner model (OJ)
This work investigated the models for estimating the cost of equity capital and their respective results based on empirical data with the intention of responding to the following research question: Is there a significant difference among the values estimated for the cost of equity capital using different calculation methods?
Summary
One of the most important steps in the process of valuing companies, mainly those listed on stock exchanges, is to measure their cost of equity capital. Much of the importance of adequate estimation of this variable rests in the sensitivity of the valuation models to changes in the discount rates employed. Several models have been developed to ascertain, within the premises of economic rationality, what a determined company’s cost of equity capital is. In order to compare the methods for estimating this variable, this work investigates whether there are statistically significant differences among the equity capital costs estimated for Brazilian companies through the following models: i) Gordon model; ii) capital asset pricing model (CAPM); iii) arbitrage pricing model (APM); and iv) Ohlson-Juettner model (OJ).
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