Latin American Companies Research Articles

The performance of corporate bond issuers in times of financial crisis: empirical evidence from Latin America

PurposeThe fundamental theory of Modigliani and Miller (1958) states that a firm's financing decisions are independent from the firm's value. Nevertheless, several empirical studies as well as theoretical approaches from the past decade impugn this relation for real markets with their immanent inefficiencies. However, these questions are rather than academic in nature: Especially the influence of macroeconomic conditions on the market perception of debt issues is from high economic importance, since the need for new liquidity usually becomes even more urgent when the economic conditions worsen.Design/methodology/approachThis paper analyzes the reaction of shareholders to the issue of debt by Latin American firms under special consideration of the macroeconomic sentiment. To do so, a sample of debt issued by Latin American companies between 2003 and 2010 is empirically examined through an event study.FindingsThe authors empirically demonstrate that specifically in Latin America, debt issuing companies show a significant underperformance during recessionary periods and an overperformance during nonrecessionary periods. These findings differ from previous results for mature capital markets. The authors conclude that not only the overall economic conditions matter to explain stock market reactions on bond issues but also the maturity of the corporate debt market plays an important role.Originality/valueThe authors provide first evidence that the previously described changes in the returns on specific stocks depending on the economic sentiment (Baker and Wurgler, 2006) are under certain conditions also present in the market for corporate debt.

Environmentally-responsible corporate: Actions analysis of Latin American pulp and paper industry

This article aims to list environmental practices used by Latin American companies in the pulp and paper industry, to create a list, through a scientific method, that can direct other researchers and managers interested in the subject. The research strategies used were bibliographic research and content analysis. The content analysis used 36 sustainability reports published by Latin American companies in the industry between 2018 and 2019. Although 264 companies were mapped, only 36 of them presented sustainability report possible to be accessed. Through the sample of 36 sustainability reports, 36 sustainable environmental practices were identified that could be grouped into five groups, namely: (1) Reuse of waste, efficiency in the production process and effluents treatment; (2) Preservation and area recovery; (3) Energy efficiency; (4) Initiatives with stakeholders; (5) Control of gas emission. Despite the exploratory nature, the information presented here can be used by managers in the area and researchers interested in improving environmental practices of the pulp and paper industry.

Assessing dialogic features of corporate pages on Facebook in Latin American companies

PurposeThis study aims to analyze whether companies from six Latin American countries are encouraging dialogic communication on Facebook.Design/methodology/approachTo do so, the paper studied the level of predisposition for interaction and the type of interaction achieved by companies on Facebook to produce an effective dialogic communication exchange and to generate conversation through different types of communication exchange between organizations and users. This research includes a specific analysis of the active presence, interactive attitude, interactive resources, responsiveness and conversation of 29,078 posts on 135 corporate fanpages of companies from six Latin American countries.FindingsThe results show that companies have a low interest in managing communication from a dialogic perspective on the social network, not only because a greater predisposition to interaction is needed, but also because the interaction generated is very low. Therefore, the paper identifies the need to review the communication strategy on social networks and to define a strategy aligned to the dialogic nature of the social network.Originality/valueThis research contributes to broadening the conceptual reflection on the evaluation of the dialogue in the digital context and aims to generate new methodological contributions to the evaluation of dialogic communication in an integrated way.

Impact of corporate governance on the value of Latin American companies: evidence from the MILA

Corporate Governance is a mechanism that seeks to strengthen the control bodies and their efforts, by combining principles and techniques to invigorate the value of companies and generate confidence in investors and all Stakeholders. This research seeks to analyze the impact of corporate governance on the values of companies that belong to the Latin American Integrated Market (MILA). The financial statements of the 97 companies from the years 2012 to 2018 were analyzed using a statistical panel data model to establish the relationship between the corporate governance variables and the financial performance variables. Lastly, it is concluded that non-economic mechanisms such as the implementation of adequate control policies positively influence the value of companies and generate support for investors.

Promoción de la calidad de vida a través del periodismo responsable digital

Durante este siglo, la Calidad de Vida (CV) se ha convertido en una prioridad para muchos países. Existe un claro interés porque las distintas organizaciones de la sociedad, como los medios de comunicación, colaboren para que sus ciudadanos cuenten con mejores estándares de vida. El objetivo de la investigación es caracterizar la promoción de la calidad de vida en notas periodísticas de empresas latinoamericanas en el marco de un periodismo digital responsable (PDR), para lo cual se desarrolla desde el concepto de calidad de vida y los ámbitos en los que se estudia, con la intención de identificar los rasgos de la calidad de vida. Se implementó un enfoque cuantitativo, descriptivo y transversal que permitió analizar las notas publicadas en tres periódicos latinoamericanos en 2019. Los resultados demuestran que hay una baja difusión acerca de la calidad de vida en los mensajes en donde no se detectaron las características que el lector pudiera identificar con los indicadores de calidad de vida social. Sin embargo, las notas periodísticas se apegan a los principios del PDR como la veracidad, el lenguaje objetivo y la reflexionética de la profesión.

Innovation Efforts in the Face of Institutional Obstacles in Latin America

Among scholars, politicians and practitioners, innovation has become a priority. However, a consensus and convergence have yet to be reached in the literature regarding the factors that determine innovation efforts at the firm level regarding developing countries. Thus, the general aim was to gauge to what extent rapid internationalization and relational triggers enable a potential for innovation efforts in companies from Latin American countries faced with the perception of the gravity of institutional obstacles. In methodological terms, a database of the World Bank (Environment Surveys) was used, with 14,064 companies from 20 Latin American countries, with responses to question related to their innovation efforts. Unprecedented contributions were collected, as this was the first time that the perception of the gravity of institutional obstacles was jointly and empirically evaluated, together with evidence of rapid internationalization and the use of relational triggers, to explain innovation efforts, considering many firms from Latin American companies. This work also provides some clues about the potentializing effect of rapid internationalization in the relationship between institutional obstacles and innovation efforts. The main results allow a better understanding about inter- and intra-group analyses, demonstrating in which groups of Latin American company’s innovation efforts are more significant and distinctive, and therefore require pro-market and pro-internationalization public policies.

Determinants of unreported income in Latin American companies: a business perspective

Determinants of unreported income in Latin American companies: a business perspective

Relación comercial México – Latinoamérica

In this work, commercial exchanges are quantitatively analyzed (imports and exports) of Mexico with respect to its commercial partners in Central and South America, for this purpose, the existing commercial balances between the various countries have been taken into account, subjecting the analysis of the information to the correlation of two variables: on one hand, the correlation coefficient, in such a way that a dependent relationship can be established between the aforementioned| economics; likewise, the implication of the treaties in the increase in exports is determined and analyzed. The interpretation of these data is useful for those who intend to acquire a panoramic perspective of the foreign trade that the Latin American countries affect and that keep Mexico as their destination. Taking into account these data and the comparative advantage of these nations, some sectors are provided that could represent niches of opportunity for the export of goods to Mexico for micro, small and mediumsized Latin American companies.

China’s Influence in Latin America in the Brazilian Case (2002-2018)

In this paper the authors aim to establish the reasons that led the Chinese state to view Latin America as an important partner between 2002 and 2018 and try to analyse the development of Chinese presence in Latin America and its possible impacts and perspectives in the 21st century in Brazil. For that, both political and economic relations between China and Latin America’s countries, especially the relations between China and Brazil, and their development are examined by using a comparative and historical approach. This paper is divided in three sections. The first part characterizes the emergence of Asia as a prominent actor within the current world system and China’s participation as a major economic competitor from the 1980s. In the second section, the Chinese interest in Latin America and its importance is analysed. Finally, the influence of China in Brazil is exposed in the last section. In the conclusion, undoubtedly, the Asian country has a huge influence in areas where it conquers, especially in Latin America and Brazil, leading mainly investments and its products of both high technology and low cost. In the short term, countries that receive this type of investment see an increase in production and, consequently, an economic improvement due to the increase in the market and the consumption process. On the other hand, Latin American companies and industries do not have the technological capacity or, to a certain extent, a competitive advantage to compete with Chinese products in the long term, due to the stricter labour laws in American countries, compared to the Asian country. Hence, one of Brazil’s possible strategies for meeting the challenges of expanding relations with China is to invest in greater complementarity and structural integration of the region through MERCOSUR.

The possibilities and limitations regarding the use of impact evaluation in corporate social responsibility programs in Latin America

PurposeImprovement in the evaluation methodologies used in the public policy and development fields has increased the amount of evidence-based information available to decision makers. This helps firms evaluate the impacts of their social investments. However, it is not clear whether the business sector is interested in using these methods. This paper aims to describe the level of interest in, knowledge of and preferences relating to the impact evaluation of corporate social responsibility (CSR) programs by managers in Latin American companies and foundations.Design/methodology/approachA survey of 115 companies and foundations in 15 countries in Latin America was conducted in 2019.FindingsThe results indicated that most respondents believed that quantitative impact evaluation could address concerns about CSR program outcomes. However, monitoring and evaluation were primarily seen to be for tracking program objectives rather than for making strategic decisions about innovations to enhance the achievement of outcomes. Decision-making tended to respond to community demands. The main challenges to increasing the use of impact evaluation were the lack of skills and knowledge of management staff and the methodological complexity of evaluation designs. We conclude that there needs to be increased awareness about: the appropriate understanding of social outcomes; the benefits of evaluation; when impact evaluation is useful; how to prepare an evaluation budget; and the effective use of rigorous evidence to inform program design.Originality/valueAcceptance by the business sector of quantitative measurement of the social impact of CSR programs will lead to improved outcomes from social investment programs.

Do Latin American universities engage industry in the scientific publication? A bibliometrics approach through Scopus

The main objective of this work is to determine the collaboration level of Latin American universities with companies in terms of scientific co-authorship, and to identify the main institutions involved in these collaborations. To do this, all publications from 2009 to 2018 with at least one co-author belonging to each of 20 Latin American countries, and another co-author affiliated to a company, were extracted from Elsevier’s Scival (powered by Scopus data), obtaining a set of 22,469 records, from which 1,531 companies (both of public and private nature) and 428 Latin American universities were identified. Despite publications co-authored by universities and companies are highly-cited, results evidence low percentages of academic collaboration between Latin American universities and companies over the period. Just few firms (mainly from Pharmacy, Technology and Petroleum markets) have established strong connections with few universities, mainly from Brazil, whose performance masks the remaining minor linkages established in other countries. Otherwise, the presence of publicly-traded companies (e.g., Petrobras, Agrosavia, Embrapa, YPF or Petróleos Mexicanos) is also remarkable. The establishment of stable public policies aimed at promoting and strengthening University-Industry relations in the region, and based on the integration and regulation of these actions in the researcher's activities, is recommended.

Get Vigorous with Physical Exercise and Improve Your Well-Being at Work!

The aim of this study is to investigate whether people who exercise regularly have higher levels of psychological well-being at work. Doing physical exercise is a habit that not only has consequences for physical and mental health, but it can also have positive consequences for organizations because physical exercise makes it easier for the employee to recover from physical, mental, and emotional effort during the workday, thus showing higher levels of engagement the next day. Through the analysis of structural equation models in a sample of 485 workers from different Spanish and Latin American companies, this study shows that subjects who exercise more have higher levels of vigor in physical exercise, which is positively related to high levels of well-being at work. This means that organizations that promote activities related to physical exercise among their employees are building a process of resource recovery, which, through the vigor of these activities, makes workers feel less stressed and more satisfied, thus experiencing greater well-being at work. Therefore, at a practical level, these results suggest that the practice of physical exercise is a tool for organizations that want to promote their employees’ psychological well-being.

Effects of capital structure and institutional–financial characteristics on earnings management practices

PurposeThe purpose of this article is to analyze the effects of financing policy and countries' institutional–financial characteristics on earnings management (EM) practices in Latin American companies.Design/methodology/approachThe GMM estimator was used according to Arellano and Bover (1995) for panel data on a sample of 983 Latin American companies between 1995 and 2017.FindingsLeverage and short-term debt have a negative and nonlinear effect on EM practices. Nonlinearity suggests that firms with high levels of leverage and short-term debt carry out positive discretionary accruals. Countries' institutional and financial development reduces EM practices. Mandatory IFRS adoption also reduces these practices and mitigates the effects of the low institutional and financial development on EM.Originality/valueThese results reveal the relevance of companies' financing policy as a means of controlling EM practices. Results also suggest that policy effectiveness decreases with leverage and short-term debt. It is suggested that policymakers design financial policies aimed to promote institutional and financial development as a means of systematic control over EM activities, which also includes IFRS.

Financial Crisis Effect on Latin American Companies’ Debts

Purpose: This study aims to verify changes in the debt structure of companies in the main Latin American countries. Approach/Methodology/Design: A difference-in-differences test is applied in a sample of 520 publicly-traded and closed companies, whose data are collected in the previous (2003-2007) and subsequent (2008-2012) periods of the crisis. Findings: The results include the replacement of bank debts by private and public non-bank debts, reduction of maturity of debts and relevance of better level of governance or regulatory environment of countries in guaranteeing the rights of creditors in this process. Practical Implications: These results are in line with the countercyclical fiscal policy adopted by these countries, guaranteeing them greater credibility in international markets. Social Implications: This study also suggest questions for future research. Each Latin American country faces many problems that are motivated by diverse events - political, for example - that impact the economy. That task involves the broadening of this methodology to incorporate internal shocks as well as global crisis. Originality/Value: One of the principal contributions of this study is the finding that companies in the main Latin American countries replace their banking credit by utilizing non-banks, just as done by the developed countries. Understanding better this effect of the global financial crisis may lead to helpful permanent macroeconomic and microeconomic measures.

RESPONSABILIDAD SOCIAL CORPORATIVA: ESTRATEGIA EMPRESARIAL PARA EL DESARROLLO SOSTENIBLE

La Responsabilidad Social Corporativa es actualmente una temática de constante discusión y análisis, puesto que desde distintas perspectivas se busca posicionar este concepto no solo como un mecanismo empresarial de ser agradables ante la sociedad o la comunidad; sino más bien como una estrategia de crecimiento empresarial a mediano y largo plazo. El presente trabajo tiene como objetivo analizar los conceptos, origen y estado actual de las empresas socialmente responsables, para de esta forma establecer pautas que conviertan a las organizaciones en comunidad. Se analizan los criterios que dan soporte a una estructura empresarial responsable con la colectividad. Además, se analiza el grado de responsabilidad con el que se manejan las empresas latinoamericanas en el contexto mundial. Se concluye que si bien las empresas son conscientes de la importancia de la RSC y su consecuente impacto positivo aún quedan tareas pendientes para posicionar políticas de este tipo entre los empresarios y ejecutivos. Las instituciones deben ser concebidas como comunidad, partiendo de valores morales y éticos que fomentan el desarrollo de una identidad replanteada a partir de la apertura hacia las necesidades de los demás. Palabras clave: comunidad, ambiente, organización, criterios, responsabilidad.

Латинская Америка: ТНК с государственным участием

Internationalization is dynamic process that many economists around the world try continually to understand and analyze. Under globalization the borders disappear gradually due to the FDI flows. The main actors of the modern economy are the multinationals, which control more than 70% of the world trade and industry. In Latin America transnationalization has led to the rise of proper TNCs – “translatinas”. At the same time, one of the interesting phenomena of the modern world economy is the growing role of state-owned multinationals. State-owned multinationals have recently gained a significant role in the global economy. Economists around the world observe a reinvention of state ownership. Though the number of state-owned “translatinas” appears reduced, due to their size and strategic importance these play key role in countries’ economies. The majority of recent researches on “translatinas” focuses on quantitative indexes, however, because of the weakening investment flows in the region, the study of the qualitative aspects of “translatinas” has become more relevant, particularly addressing the ones with state participation. There are several state-owned enterprises in Latin America that have become multinationals, and they are the most powerful, successful and the most significant Latin American companies. After having saturated their respective domestic markets, “translatinas” started to invest abroad and have become sponsors of international projects first in Latin America, and then all over the globe. The article analyzes how state-controlled “multilatinas” influence economic growth in Latin American countries from the prospective of international competitiveness. The authors concentrate on the role of state-owned “translatinas” in enhancing infrastructure, developing information and communication technologies, innovating, and improving human capital.

Capital structure and performance in Latin American companies

The purpose of this study is to explain the financial performance of companies in Latin America through the lens of capital structure and ownership structure. We perform a quantitative analysis of companies in Brazil, Chile, Mexico, and Peru using a panel data method. To avoid endogeneity problems, instrumental variables, generalised method of moments models, and panels with random effects are employed. The data cover the period 2000 to 2015. We find a positive relationship between financial performance, growth, and size of the company. However, there are mixed results for short- and long-term financial leverage, as well as for company liquidity. With respect to the ownership structure of Chilean companies, a positive effect is observed for the first major shareholder with financial performance. In general, our results are in line with those of previous studies. However, the existence of mixed results between companies and countries makes for an interesting and novel conclusion.

Influência dos ativos intangíveis no desempenho econômico de empresas latino-americanas

O estudo teve como objetivo verificar a influência dos ativos intangíveis no desempenho econômico de empresas latino-americanas. Para tal, realizou-se uma pesquisa descritiva, documental e quantitativa. A amostra do estudo é composta por 543 empresas argentinas, brasileiras, chilenas e mexicanas, listadas nas respectivas bolsas dos países analisados. Os dados foram coletados na base de dados Thomson ® em dezembro de 2015 relativos ao período 2010 a 2014, analisados por regressão de dados em painel. Os resultados sugerem a influência do grau de intangibilidade sobre o desempenho das empresas, sendo que a evidência mais forte foi observada em empresas argentinas. Nas empresas brasileiras, os resultados evidenciaram que o grau de intangibilidade influencia negativamente o retorno sobre o patrimônio líquido. Com base nos resultados do estudo, pode-se concluir que os ativos intangíveis podem influenciar o desempenho das organizações, entretanto, tal influência depende de fatores e características de cada país.

Inclusión financiera: Factor clave en la esperanza de vida de las Mipymes en países de Latinoamérica

MSMEs are of vital importance in the economic and social development of the nations of Latin America, comprise 99% of the formal Latin American companies, are the main generators of employment with 61% and contribute with 25% of the GDP of that region. Unfortunately, the average life expectancy is less than 10 years because these businesses face various problems, highlighting access to financing. The objective of this research is to determine the impact of financial inclusion on the life expectancy of MSMEs in Mexico, Colombia and Chile. An exhaustive analysis of both variables is carried out with data from reports, surveys and specialized studies. Some results indicate that the main source of financing for these companies is not the financial institutions, on the contrary, they are the resources that their owners invest and the main obstacle to not accessing external financing is the high interest rates. This research contributes to show the current conditions of MSMEs in order to design public policies that strengthen financial inclusion to improve their permanence and competitiveness in the market.

Communicating corporate social responsibility issues on Facebook’s corporate fanpages of Latin American companies

The new organizational context in Latin America has changed the relationships between companies and stakeholders. Companies need to increase trust and transparency, and corporate social responsibility (CSR) communication can help Latin American companies become legitimated in the social environment by strengthening relationships with their stakeholders. This study analyzes how Latin American companies communicate their CSR activities to their stakeholders on Facebook. The research includes a specific analysis of CSR presence, activity, contents, and resources on the corporate fanpages. The results reveal that content about CSR topics are not frequently published in this social network. Companies focus their communication on their economic topics rather than their social issues, and they are using Facebook as a dissemination channel rather than as a communication channel. They mainly manage fanpages to obtain visibility, thereby missing the opportunity offered by the social network to promote dialogue and participation about CSR activities with their stakeholders.