Does the Use of Foreign Currency Derivatives Affect Colombian Firms’ Market Value?

Classic financial theory relies on the absolute perfection of capital markets, which results in one of the milestones of theoretical corporate finance: the firm’s value is invariant to the choice of capital structure. As an extension to the aforementioned proposition by Modigliani and Miller (1958), corporate risk management is also futile. Nevertheless, it is clear that capital markets do not work with absolute perfection. There exist frictions which make risk management decisions essential for the firm’s value. Moreover, derivatives’ market vast importance is a good proxy of the relevance of hedging decisions for corporate finance. There is a remarkable volume of literature which tests the effects of risk management and hedging decisions for the value of the firm, mainly for the US corporate market. However, there is little effort on this subject for markets which work even farther from absolute perfection. This document undertakes such task for the Colombian market. Focused on non-financial firms and the local’s most liquid derivatives market, we find that for a panel of eight large Colombian corporations, the growth rate of Tobin´s Q depends significantly on firm´s size and hedging. Our results suggests that, after controlling for relevant financial variables such as firm´s profitability and leverage, and other variables such as firm´s age, an increase in hedging leads to a higher growth in the firm´s value.Modigliani-Miller, risk management, hedging, firm value, emerging market, Tobin´s Q. Classification JEL: G32, G30, L25.

An econometric analysis of tourism in Spain: implications for the sectoral study of exports and some economic policy considerations

This paper deals with the construction of econometric models to explain the external demand for Spanish tourist services. The models include as explanatory economic variables a tourist income index and two real exchange rate indices, one with respect to client countries and the other with respect to competitor countries. The results obtained : a) support the hypothesis that the decision to expend on tourism is made in two stages with different price and income elasticities in each of them; b) show that the recent drop in demand is due to a -real exchange rate effect. With the models constructed it is possible to evaluate to what extent the drop in demand is due purely to the effect of prices and to 'what extent it is determined by exchange rate movements. The latter have had an important effect, so that a policy of appreciating the peseta indeed has different sectoral effects. This different sectoral effect, as well as the importance of distinguishing between client countries and competitors, suggest that economic policy must not be based on just one index of the effective exchange rate of the peseta but on several

Neural Network Local Navigation of Mobile Robots in a Moving Obstacles Environment

IF AC Intelligent Components and Instruments for Control Applications, Budapest, Hungary, 1994This paper presents a local navigation method based on generalized predictive control. A modified cost function to avoid moving and static obstacles is presented. An Extended Kaiman Filter is proposed to predict the motions of the obstacles. A Neural Network implementation of this method is analysed. Simulation results are shown.Ministerio de Ciencia y Tecnología TAP93-0408Ministerio de Ciencia y Tecnología TAP93-058

The differentiated impact of role models and social fear of failure over the entrepreneurial activities of rural youths

The main objective of this study is to determine the differential impact of certain socio-cultural variables (such as entrepreneurial self-confidence, role models and fear of failure) on the entrepreneurial process of Spanish rural youths. In consonance with the new rural policy paradigm, the European Commission and the OECD are proposing entrepreneurship as a tool for economic diversification and endogenous rural development. Entrepreneurship is associated in rural areas with economic vitality and prosperity. Entrepreneurship in rural areas becomes a means for capturing and optimizing the true natural, social and human capital of a territory as well as a source of opportunity and welfare for the local population. However, in a context where many rural areas are suffering from an aging and retiring population, the emphasis on developing an entrepreneurially active community becomes especially important within the segment of rural youths. Environmental and social-cultural factors have been used to explain differences in entrepreneurship across territories, including the rural urban divide. This line of research has found that certain variables, such as the local presence of role models and the social stigma of failure, have a differential impact over entrepreneurial activity across certain segments of the population (gender, immigrant status). Therefore, this study has the objective to verify whether age affects the impact that certain socio-cultural variables have on the entrepreneurial process of rural and urban youths. The methodology used in this study is the logistic regression model for rare events, with a database of the Global Entrepreneurship Monitor in Spain for 2009, which has a sample of 26,990 adults. The study shows that young adults in Spain have a higher propensity for entrepreneurial activity than the rest of the population, but discriminating between urban and rural youth, the latter are less likely to be entrepreneurs. Amongst younger-aged individuals, social-cultural factors are found to have a differential impact on entrepreneurship across the rural-urban divide.Peer ReviewedPostprint (author’s final draft

Fuzzy Predictive Controller for Mobile Robot Path Tracking

IFAC Intelligent Components and Instruments for Control Applications, Annecy, France 1997This paper presents a way of implementing a Model Based Predictive Controller (MBPC) for mobile robot path-tracking. The method uses a non-linear model of mobile robot dynamics and thus allows an accurate prediction of the future trajectories. Constraints on the maximum attainable angular velocity is also considered by the algorithm. A fuzzy approach is used to implement the MBPC. The fuzzy controller has been trained using a lookup-table scheme, where the database of fuzzy-rules has been obtained automatically from a set of input-output training patterns, computed with the predictive controller. Experimental results obtained when applying the fuzzy controller to a TRC labmate mobile platform are given in the paper.Ministerio de Ciencia y Tecnología TAP95-0307Ministerio de Ciencia y Tecnología TAP96-884C

Firm Failure and Relationship Lending:New Evidence from Small Businesses

We study the effect of relationship lending on small firms failure probability using a uniquely rich data set comprised of information on individual loans of a large number of small firms in Colombia. We control for firm-specific variables and find that small firms involved in long-term liaisons with commercial banks have a significantly lower probability of becoming bankrupt than otherwise identical firms not involved in a long-term credit relationship. We also find that small firms with multiple banking relationships face a lower failure hazard than otherwise identical firms involved in a unique long-term relationship.Firms, bank relationships, survival analysis. Classification JEL: G20, G21, C40.

Failing and Merging as Competing Alternatives during Times of Financial Distress: Evidence from the Colombian Financial Crisis

This paper studies the determinants of individual bank failures and M&A processes in Colombia during the financial crisis of the late 1990s. Using bank-specific data we estimate competing risk hazards models and find that while profitability and capitalization are the most important determinants of the probability of failing, bank´s size, efficiency and capitalization are the main determinants of the probability of participating in an integration process. All else constant, an increase in capitalization reduces the probability of disappearing, whether due to the occurrence of bankruptcy, a merge or an acquisition. However, a marginal increase in capitalization reduces significantly more the probability of bankruptcy than the probability of integration. This study is the first to present a competing risks hazard model to identify covariates that excerpt significant influence on the probability of failing or merging for banks of an emerging economy.Survival analysis; Competing risk models; Colombia. Classification JEL: G21; G33; G33; C25

Nota sobre o conceito de incomensurabilidade dos escritos de J. Bruner sobre cultura e mente e de Castorina sobre as representações sociais

En el presente artículo se analiza el concepto de inconmensurabilidad a la luz de lo que está ocurriendo en diferentes disciplinas relacionadas con la psicología. Se detecta que hay muchos conceptos que se aplican en diferentes estudios sin que exista una elaboración o re-elaboración conceptual a partir de nuevos atributos identificados en un determinado fenómeno; a veces es una mera sumatoria terminológica, y en otros casos se trasladan conceptos sin precisar la ontología o la taxonomía de la que forman parte. Se describen dos trabajos teóricos - el de Castorina y el de Bruner - para ejemplificar los argumentos que se exponen. Finalmente, se argumenta que existiría un cierto margen de espacio común entre las teorías psicológicas, el cual, se podría representar, por ejemplo, en la resolución de "problemas" (tanto teóricos como empíricos. Es decir, una teoría es válida mientras sea apelada por una parte importante de la comunidad científica (para investigación principalmente, y secundariamente para la práctica profesional).In the present paper, the concept of incommensurability is analyzed in the light of what is happening in different disciplines related to psychology. It is detected that there are many concepts that are applied in different studies without a conceptual elaboration or re-elaboration from new attributes identified in a certain phenomenon. Sometimes it consists of merely adding together many terms; in other cases, concepts are transferred without specifying the ontology or taxonomy of which they are part. Two theoretical works are described - one by Castorina and the other one by Bruner - to exemplify the arguments expressed. Finally, it is argued that a certain margin of common space would exist between psychological theories, which could be represented, for example, in the resolution of "problems" (both theoretical and empirical). That is to say, a theory is valid while it is questionned by an important sector of the scientific community (mainly for research and secondarily for professional practice).No presente artigo analisa-se o conceito de incomensurabilidade à luz do que está ocorrendo em diferentes disciplinas relacionadas com a psicologia. Detecta-se que há muitos conceitos que se aplicam em diferentes estudos sem que exista uma elaboração ou reelaboração conceitual a partir de novos atributos identificados em um determinado fenômeno; às vezes é uma mera somatória terminológica, e em outros casos se trasladam conceitos sem especificar a ontologia ou a taxonomia da que formam parte. Descrevem-se dois trabalhos teóricos - o de Castorina e o de Bruner - para exemplificar os argumentos que são expostos. Finalmente, argumenta-se que existiria certa margem de espaço comum entre as teorias psicológicas, que poderia ser representado, por exemplo, na solução de "problemas" (tanto teóricos como empíricos). Ou seja, uma teoría é válida enquanto for apelada por uma parte importante da comunidade científica (para pesquisa principalmente, e secundariamente para a prática profissional)