Fátima Sol Murta and Paulo Miguel Gama
What is the impact of financial literacy on the lending activity of banks? Based on the results of the S&P Global FinLit Survey for an extensive sample of countries, this paper…
Abstract
Purpose
What is the impact of financial literacy on the lending activity of banks? Based on the results of the S&P Global FinLit Survey for an extensive sample of countries, this paper aims to provide the first global test for the impact of country-level financial literacy on the lending activity of commercial banks.
Design/methodology/approach
The authors use data on financial literacy by country from the S&P Global FinLit Survey that was completed in 2014 and lending activity and macroeconomic control variables data from the World Bank from 2015 to 2017 to estimate the cross-sectional effect of financial literacy on the importance of loans and of non-performing loans, using different estimation methods.
Findings
The results show that, first, financial literacy favors lending activity, contributing to enhance the importance of credit in the economy. Second, financial literacy prevents bad loans from building up, thus reducing credit risk and favoring the quality of the credit portfolio of banks. These results are robust to several controls for macroeconomic conditions and the quality of institutions. They are also robust to different estimation methods.
Research limitations/implications
The evidence of the positive (negative) impact of population financial literacy on the quantity (poor quality) of loans suggests that the efforts to enhance the financial literacy of the population contribute to the sustainable development of the financial sector and economic growth.
Originality/value
The paper extends to an international and country-level the available evidence of the consequences of the existence (or lack of) of financial literacy for the lending activity of commercial banks, focusing on the amount of credit granted and the quality of such credit. Thus, the paper provides an exploratory analysis of the impact of country-level financial literacy on the lending activities of commercial banks.
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Maria Amélia Pais and Paulo Miguel Gama
– The purpose of this paper is to provide empirical evidence on the effects of working capital management on the profitability of small and medium-sized Portuguese firms.
Abstract
Purpose
The purpose of this paper is to provide empirical evidence on the effects of working capital management on the profitability of small and medium-sized Portuguese firms.
Design/methodology/approach
Panel regressions (fixed effects) and instrumental variables were used to model a sample of 6,063 Portuguese small and medium-sized firms (SMEs), covering the time period 2002-2009. Also, industry-demeaned values and industry-specific dummy variables allow for industry-specific effects robustness tests.
Findings
Results indicate that a reduction in the inventories held and in the number of days that firms take to settle their commercial liabilities and to collect payments from its customers are associated to higher corporate profitability. Similar results are obtained when industry-specific effects are controlled, supporting the robustness of the previous analysis. The relevance of quadratic dependences of the profitability on some variables was also identified and suggests a decreasing trend of return on assets with increasing values of the working capital management characteristic variables.
Practical implications
The practice of more aggressive working capital management policies increase firms’ profitability. Moreover, the importance of a good practice in working capital management is stressed by the evidence suggesting the existence of an optimal level for the working capital components.
Originality/value
The consensus that SMEs play a crucial role in the development of the national economy, the lack of published industry wide studies of this type for the case of Portugal, justifies the importance of the present study.
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Flavia Cristina Silva, Fabio Ytoshi Shibao, Isak Kruglianskas, José Carlos Barbieri and Paulo Antonio Almeida Sinisgalli
In total, 19 practices of circular economy divided into three groups, internal environmental management, ecological design and investment recovery were studied in a local network…
Abstract
Purpose
In total, 19 practices of circular economy divided into three groups, internal environmental management, ecological design and investment recovery were studied in a local network composed of small companies and individual entrepreneurs related to common product and by-product flows. The paper aims to discuss these issues.
Design/methodology/approach
This research presents an applied nature, is characterized as exploratory and adopted the case study as a technical procedure using sources and methods of data collection. The primary data were collected through direct observation of the processes and semi-structured interviews with managers and owners.
Findings
The most widespread practices are related to product design. However, in most cases, the implementation was punctual and did not present continuous and corresponding actions, which highlights the embryonic contours of European Commission (EC) in the observed network. The practices from the management category were less observed, which revels the environmental variable is not included in the strategic business planning.
Research limitations/implications
The research documents the application of CE practices in a local network and brings this current paradigm shift to the Brazilian context.
Practical implications
To overcome barriers to the implementation of EC practices, it is suggested to restructure commercial relations, to formulate public policies and to develop infrastructures that facilitate the materiality of flows and the market.
Social implications
The study highlights the need of public policies that promotes cross-sectoral cooperation in accordance with NSWP objectives.
Originality/value
Despite the focus on EC implemented practices this study offers a framework of the research routes on the main barriers and suggests actions to overcome the challenges in the transition from the economy to the circular model.
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Emerson D. Pacheco, Flávio I. Kubota, Eduardo K. Yamakawa, Edson P. Paladini, Lucila M.S. Campos and Paulo A. Cauchick-Miguel
Increased competition and access to information are forcing companies to provide quality to their products and services, aligned with a growing society pressure for less harmful…
Abstract
Purpose
Increased competition and access to information are forcing companies to provide quality to their products and services, aligned with a growing society pressure for less harmful environmental practices. The purpose of this paper is to demonstrate how the adoption of reverse logistics (RL) may contribute to the generation of competitive advantage and improved quality in a part substitution process of a household appliance company.
Design/methodology/approach
This paper carried out a single case study in a household appliance company. The study collected data through semi-structured interviews in addition to document analysis and observation.
Findings
The implemented practices enhanced service maintenance and customer services and provided a more effective monitoring of defective parts. Moreover, such practices reduced unnecessary part substitutions, consumer dissatisfaction and undesired disposal in the environment. RL in the studied company has offered a potential contribution to the company quality strategies by providing more part returns, assuring cost savings, and reducing time to solve field problems.
Research limitations/implications
The study was limited to a single case study. Thus, the study findings are not subject to generalization for other similar organizations.
Originality/value
This paper is one of the few studies on RL in a household company in the context of an emerging economy. Such feature denotes in a singular scenario in RL investigations about recovering defective parts.
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Álvaro José Back and Luana Pasini Miguel
The purpose of this paper is to evaluate the seasonal and spatial variations in the statistical descriptors of the Markov chain model as well as the expected values of the length…
Abstract
Purpose
The purpose of this paper is to evaluate the seasonal and spatial variations in the statistical descriptors of the Markov chain model as well as the expected values of the length of dry and wet days and to estimate the probability of dry and rainy sequences in the state of Santa Catarina.
Design/methodology/approach
Daily rainfall data from 1970 to 2013 of five rainfall stations in the state of Santa Catarina were used. To model the sequence of dry and wet days, the first order of the Markov chain was used. The statistical descriptors of the Markov model were evaluated, as well as the expected values of the length of dry and wet days and the number of dry and rainy days for each month. Along with geometric distribution, the probability of occurrence of sequences of dry and rainy days was determined. The adherence of the data to geometric distribution was evaluated using the Kolmogorov-Smirnov test.
Findings
The results showed that there is a seasonal and spatial variation in Markov model descriptors and also in the duration of the dry and rainy periods. These variations may be related to the mechanisms responsible for the formation and distribution of rainfall in the state, such as the air masses and relief. The Lages station, located in the Plateau of Santa Catarina, had the highest P00 values, reflecting more stable conditions of the atmosphere. In autumn and winter, no marked differences were found between the coastal stations and west of the state. The geometric distribution was adequate for estimating the probability of dry and rainy days.
Originality/value
Although some work has already been carried out on the modeling of the Markov chain in the state of Santa Catarina, this study was found to be more complete with the use of various statistical descriptors of the model and its application in estimating the duration of the cycles of dry and wet periods and the number of rainy days in the period.
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Dora Almeida, José Massuça, Ana Fialho and Andreia Dionisio
Strategic management is the focus area in this case study, so it is important to consider different sources of information to make strategic decisions. Considering the different…
Abstract
Research methodology
Strategic management is the focus area in this case study, so it is important to consider different sources of information to make strategic decisions. Considering the different options of Wine Cooperative of Vidigueira Cuba & Alvito (ACVCA), it is necessary to know the strengths and weaknesses of each option and identify respective opportunities and threats. Additionally, it is important to know the case study object (such as operating specific characteristics, products and management model); the competition; the evolution of the wine sector in Portugal and worldwide; the evolution of the tourism sector in Portugal and worldwide; and new trends in wine and tourism.
Case overview/synopsis
In January 2018, Mr Jose, leader of the Board of Directors (BD) of the ACVCA, one of Portugal’s oldest wine cooperatives, located in the south of the country, in the Alentejo region, is preparing the first meeting with the newly elected BD. Addressing the strategy and sustainability for the next term of the BD is mandatory! Mr Jose will have to open the game and lift the veil. Should all their eggs be put in one basket? Or could diversification be the way? Sustainability, in its three pillars (economic, environmental and social), is mandatory, never forgetting that the cooperators want respective income guaranteed. “We can’t risk everything”, thinks Mr Jose! But ACVCA’s affirmation undoubtedly depends on its ability to take risks, to innovate and seek new answers for new audiences! The BD will have to make decisions that lead not only to the affirmation of the brand but also to its renown and to the ACVCA’s sustainable growth. There are several possible options. However, it is necessary to define a path that guarantees the stability achieved, but that allows new markets to be reached and new challenges embraced: increase production capacity, invest in internationalisation, focus on segmentation through innovation, diversification of product or diversification of business area. Wine tourism is a possible way, but how can it be done sustainably and differently? We will have to use creativity and take advantage of our strengths, traditions and customs, intangible and tangible capital and our material and immaterial heritage. It can be done through Amphora wine, produced from its exclusive centuries-old grape varieties. These issues will have to be discussed with all the BD members in the next meeting. Considering the crucial role of cooperatives in the development of the regions where they are located, the success of the strategy is extremely important not only for ACVCA, but also for all its stakeholders. Strategic management decisions in a cooperative always have a double objective: on the one hand, to satisfy the interests of the cooperators and, at the same time, to meet the interests of the market and assert its positioning in an increasingly competitive sector.
Complexity academic level
This case study is intended for:▪ undergraduate students in management, agricultural economy and tourism;▪ executive management course students;▪ Master’s students in strategy, marketing, tourism and agricultural economy; and▪ PhD students in social economy and tourism.This case can have different levels of difficulty depending on the scientific area of the students and whether the cycle of studies is more or less advanced. Resolution of the case may require the following pre-requisites:▪ basic-level knowledge on statistics;▪ medium-level knowledge on managerial accounting, economics and finance; and▪ good level of knowledge on strategic management and on cooperativism theories.
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Stefan Colza Lee and William Eid Junior
This paper aims to identify a possible mismatch between the theory found in academic research and the practices of investment managers in Brazil.
Abstract
Purpose
This paper aims to identify a possible mismatch between the theory found in academic research and the practices of investment managers in Brazil.
Design/methodology/approach
The chosen approach is a field survey. This paper considers 78 survey responses from 274 asset management companies. Data obtained are analyzed using independence tests between two variables and multiple regressions.
Findings
The results show that most Brazilian investment managers have not adopted current best practices recommended by the financial academic literature and that there is a significant gap between academic recommendations and asset management practices. The modern portfolio theory is still more widely used than the post-modern portfolio theory, and quantitative portfolio optimization is less often used than the simple rule of defining a maximum concentration limit for any single asset. Moreover, the results show that the normal distribution is used more than parametrical distributions with asymmetry and kurtosis to estimate value at risk, among other findings.
Originality/value
This study may be considered a pioneering work in portfolio construction, risk management and performance evaluation in Brazil. Although academia in Brazil and abroad has thoroughly researched portfolio construction, risk management and performance evaluation, little is known about the actual implementation and utilization of this research by Brazilian practitioners.