The Impact of FDI, Cross Border Mergers and Acquisitions and Greenfield Investments on Economic Growth

This paper investigates whether aggregate foreign direct investment (FDI), cross border mergers and acquisitions (M&A) and greenfield investments affects economic growth based on a panel data of 53 countries over the period 1996-2006. Both causality tests and single growth equations are applied to examine this relationship. The evidence suggests that there is bidirectional causality between FDI, M&A and growth. We can also conclude that economic growth Granger causes greenfields, but the reverse is not true. The estimation of the growth equation leads us to conclude that FDI through greenfield investments exerts a positive impact on economic growth in both developed and developing countries. Oppositely, M&A has a negative effect on the economic growth of developing countries, but insignificant on developed countries.Foreign Direct Investment, Cross Border Mergers and Acquisitions, Greenfield Investments, Economic Growth

The financial reporting quality effect on European firm performance

This paper analyses whether accounting quality produces any impact on firm performance using only accounting data: the abnormal accruals methodology to evaluate accounting quality and ROA to determine firm performance. This is important because accounting information guides investment decisions (Bradshaw et al., 2004 and Verdi, 2006). For 17 European countries, findings confirm the mechanical relationship between accruals and accounting measures of performance: income increasing abnormal accruals, which mean decreasing accounting quality, will increase ROA and vice-versa. In addition, the lag effect is analysed, as per Chan et al. (2004). When current performance is compared with the abnormal accruals of the previous year, results suggest that the reverse effect does not occur for two consecutive years.Accounting quality, firm performance, abnormal accruals

The Macroeconomic Determinants of Cross Border Mergers and Acquisitions and Greenfield Investments

When a company decides to invest abroad, it can do it through the establishment of a new firm (greenfield investment) or by the purchase of an already existing firm. Although there is a vast empirical literature on the macroeconomic determinants of aggregate FDI, there are just a few studies examining the location-specific determinants of each entry mode. The aim of this study is to extend the previous work by Globerman and Shapiro (2005) through the analysis of panel data of 53 countries over the period 1996-2006, in order to identify the potential location-specific determinants of both M&A and greenfields. We have found evidence that there is a group of mode-encompassing variables which are common to all entry modes (such as economy’s size, openness, governance and human development index) and mode-specific variables. Investor’s protection and cultural variables seem to play an important role in the explanation of M&A and greenfields, respectively.Foreign Direct Investment, Cross Border Mergers and Acquisitions, Greenfield Investments

Differentiator factors in the implementation of social network sites

Estágio realizado na Business Analyst da Documento Crítico - Desenvolvimento de Software, S. A. (Cardmobili) e orientado pelo Eng.ª Catarina MaiaTese de mestrado integrado. Engenharia Informática e Computação. Faculdade de Engenharia. Universidade do Porto. 200

Do economic and financial firm's situation affect the quality if financial reports?

We investigate whether firms’ economic and financial situation influence the Quality of their Financial Reports (FRQ). FRQ is fundamental for investors and it affects the international capital movements [Bradshaw et al. (2004)] and Gelos and Wei (2005)]. Following Schipper and Vicent (2003) we use two issues to access earnings quality: abnormal accruals and earnings persistence. For seventeen European countries, we find evidence that the economic performance affects FRQ. Big firms and those with high current earnings exhibit better financial information. These results are robust since they don’t depend on FRQ proxy and we have the same evidence when we estimate regression with economical and financial factors separately or together. About financial situation, it seems not to affect FRQ. However, in high leveraged firms, the capital structure becomes determinant

O Impacto da dimensão e da estrutura de capitais na qualidade das demonstrações financeiras

Neste artigo, os efeitos da dimensão e do nível de endividamento sobre a qualidade das Demonstrações Financeiras (DF) são analisados para as empresas portuguesas. Para estimar a qualidade das DF recorremos a duas abordagens: as Necessidades de Fundo de Maneio (NFM) anormais e a Persistência dos Resultados, as quais foram referidas por Schipper e Vicent (2003). A evidência empírica mostra-nos que a dimensão determina a qualidade da informação financeira e que esta relação é positiva, ou seja, as empresas maiores tendem a apresentar melhor informação. Assim as pequenas empresas carecem de mecanismos que garantam uma maior qualidade das DF. Contudo, este resultado só é estatisticamente significativo para uma das duas abordagens seguidas. Adicionalmente, a relação entre a estrutura de capitais e a qualidade da demonstração financeira não é muito consistente

Executive compensation : the finance perspective

This paper is a survey of the research on executive compensation from the period between 1995 and 2007, focusing on the most important academic publications in the area. The reason for analysing this period of time and these publications is that we believe that 13 years is enough time to cover a set of research studies that are representative of the present lines of investigation on this theme, and that the most important findings in terms of executive compensation are published in these high quality scientific publication

The effect of Financial Reports’ Quality on Firm’s Performance

We analyse whether the quality of firms’ Financial Reports (FRQ) produces any effect on their performance. Bradshaw et al. (2004) and Gelos and Wei (2005) call attention to the fact that the international capital movements is affected by FRQ. Following Schipper and Vicent (2003) we use the abnormal accruals to access earnings quality. For seventeen European countries, we found evidence that FRQ produces a positive impact on firm’s performance. This finding indicates that mangers are not opportunists and tends to make decisions to defend the firm’s best interests. This result is robust since it does not depend on the accounting firms’ performance proxy (ROA/ROE). In addition, it is also consistent when we use data in time series and in cross-sectional and when we estimate regression with lagged or the current year information about abnormal accruals