Browsing by Issue Date, starting with "2021-04-27"
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- Regulatory arbitrage and the expansion of shadow banks in the U.S. mortgage marketPublication . Gaião, Camila da Paz Campos; Bhimjee, Diptes Chandrakante PrabhudasShadow banks' market share in the mortgage market of the US has increased from 23,5% in 2009 to 57,6% in 2019. The residential mortgage market has changed dramatically in the years following the Great Recession: credit intermediation has shifted from traditional banks to shadow banks. For instance, Quicken Loans – the leading shadow bank – has become the largest mortgage lender in the United States in 2019, overtaking for the first time Wells Fargo – the historical market leader. The present research uses panel data models to show an essential aspect behind the transformation of the mortgage market herein described: the impact of the regulatory burden on 'traditional' bank lending in the USA. The research design contemplates two main regulatory variables, as well as several banking and macroeconomic control variables. To this end, annual data were extracted from the Consumer Financial Protection Bureau (CFPB), the Home Mortgage Disclosure Act (HMDA), and FRED databases. In the aftermath of the Great Recession, supervision increased, and 'traditional' banks were forced to cut back on riskier lending. Shadow banks - which fall outside the scope of conventional regulation – duly filled this market gap. The present Dissertation sustains this argument by demonstrating that stricter regulatory requirements constrain the mortgage lending growth of traditional banks, thus benefiting US shadow banks' intermediation activities, as confirmed by the two main regulatory variables herein used. Our baseline findings are subject to stringent robust testing across specifications, suggesting the findings are globally stable.
- Seaport development in AngolaPublication . Collignon, Eloi Marie François Henri; Rajsingh, PeterSeaport development is an objective set by the Angolan Government to exceed country's potential and growth. Previous literature has shown the importance of a country's efficient seaport infrastructure in a competitive and safe environment to attract investors. Angola has made improvements over the years but still needs to overcome persistent challenges to accomplish its potential. Thus, this thesis analyses seaport development's performance and its impact on Angola's GDP, identifying the main obstacles to investment and possible recommendations. To answer the research questions, I analysed an econometric analysis with Gretl Software and conducted interviews with industry experts from international institutions and executives from private companies. My findings point out the significant relationship between Liner Shipping Connectivity Index (LSCI) and Quality of Port Infrastructure Index (QPI), with Angola's GPD showing the importance of upgrading seaport infrastructure. Moreover, interviews revealed that the key investment bottlenecks in Angola involve political stability, lack of government policy, high risk of investments, and an unfavourable economic market. Lastly, this thesis suggests several recommendations to mitigate these limiting factors, such as creating stronger regulations, fighting corruption, and improving international seaport compliance.
- The effect of high-power nonverbal communication in the job interview for ex-prisonersPublication . Beisel, Raphael Vincent; Almeida, Ana Filipa Martinho deReintegrating ex-prisoners in our society has always been a challenge that doesn’t seem to have one responsible, but rather many agents that have to play an active role in it. The complexity of the task is huge, and if we look at countries that seem to be more successful in ex-prisoner reintegration like the Scandinavian countries in Europe for example, it is hard to replicate that system into another country that is fundamentally different. It seems that every country has its own strategy in how to deal with those individuals who commit crimes. The aim of this thesis is directed to what happens after prison, when the convicts get released, as it is in everyone’s best interest, that ex-prisoners do not reoffend and return to prison. One of the factors that seems to predict desistance in ex-criminals is finding a stable job, but in order to get employed, ex-prisoners have to go through a job interview, which many have never had in their entire lives. Moreover, ex-prisoners are subject of constant discrimination and stigmatization, which certainly does not help the cause. As research shows, nonverbal behaviour is a very important element in a successful job interview outcome. This thesis will examine through an experimental study, which type of non- verbal communication is most likely to get ex-prisoners hired.
- The zero-leverage puzzle : evidence from portuguese firmsPublication . Portugal, Maria Ferro Barreto Candeias; Bonfim, Diana Carina Ribeiro GuimarãesThe main objective of this paper is to identify the characteristics of Portuguese firms that have no debt in their capital structure and to understand what are the motivations behind such choices. After that, it aims at understanding if zero-leverage policies predict differences in performance during crisis periods. Using a rich source of high-quality balance sheet data for non-listed and listed Portuguese firms for the period 2006–2018, this study focuses on zero-leverage policies through an empirical analysis of 1,174,151 firm-year observations. We first present evidence that zero-leverage firms are commonly small and young and show lower levels of profitability and tangibility, when compared to their levered counterparts. Moreover, firms with no debt hoard large cash reserves and are found to have higher liquidity ratios than those of levered firms. Furthermore, we confirm that there are different motives for firms to eschew debt financing. On the one hand, findings suggest that micro firms and SMEs are financially constrained, having difficulties in accessing debt markets. On the other hand, larger firms seek for financial flexibility, in order to avoid debt overhang and preserve leverage capacity, when opting for zero-leverage policies. Additionally, we study performance levels of companies that adopt zero-leverage policies to assess if such behaviours help improving the overall firms’ functioning after crisis periods. We acknowledge moderate support for our main premise that zero-leverage firms overperform their levered counterparts, during and after crisis periods.
- Nudges for all? The effect of power on the efficiency of nudgesPublication . Martin, Gabriela Luciana; Almeida, Ana Filipa Martinho deEvery day, individuals are faced with thousands of decisions, which can have a small or a large impact in their and others lives. Contrary to the Homo-Economicus, humans behave irrationally and do not always use all the information needed to take a decision having in mind their best interest. Hence, institutions and policy makers often try to steer individuals in specific direction for better outcomes. This is particularly important for high-power individuals, whose cognitive tendencies often impair decision making, and who often decide for others, impacting many with a single decision. However, high power people are not always happy to take in advice from others and seem to like to make their own decisions. A possible solution is to use “nudges”, which are cheap and simple interventions to steer people in a specific direction while conserving their freedom of choice. This thesis studies how power effects the efficiency of a nudge. As high-power individuals are more likely to act in an automatic manner, by default, it is proposed that nudges promoting System 1 are more likely to work well on high-power than other individuals. Yet, the findings did not support the hypothesis, as there were no differences based on power. By observing the relationship between power and nudging, this research enhances the power literature and fulfils a current gap in the nudging literature.
- Probabilities of default : what is the impact of Covid-19 in portuguese micro-enterprises?Publication . Cruz, José Pedro Nolasco Amaral Gomes; Bonfim, Diana Carina Ribeiro GuimarãesThis dissertation aims to quantify the impact of the current pandemic on Portuguese micro-enterprises credit risk. To this end, the probability of bankruptcy before and after the pandemic shock is calculated using a modified version of the structural model proposed by Eisdorfer, Goyal, & Zhdanov (2019). For this exercise, representative firms were created for each of the 14 sectors under analysis. These firms were created using a database of over 200 000 firms with observations ranging between 2006 and 2018. Sector specific shocks are calibrated using data from the quick survey on the impact of the pandemic shock on firms’ business, by Statistics Portugal and by the Banco de Portugal. The results of this exercise suggest that the Accommodation and Food Services sector is the most affected sector with its probability of default within two-years increasing from 1.49% to 14.20%. On average the two-year cumulative probability of default increases by 6.46 percentage points with the current pandemic. Understanding the determinants of the shock impact, the initial liquidity level reveals to be an important factor. This dissertation demonstrates that a higher level of cash allows firms to minimize the impact of the current pandemic on the distance to default.
- Purpose-built student accommodation (PBSA) : the new reality of student housing in LisbonPublication . Pina, Gonçalo Nuno Guimarães; Rajsingh, PeterThe real estate market has been in flux. This is also true for the student housing subindustry, being part of this overall market. In more developed countries (such as the United States of America or the United Kingdom) which are leading indicators of trends, the supply of student accommodation is already relatively stable, professional, and a modern offering in the form of PBSAs (Purpose-Built Student Accommodation). PBSAs, as the name implies, are accommodations built with the purpose of being sold to students, offering all the necessary amenities for clients (private bedrooms with bathrooms and sometimes kitchens or kitchenettes) while promoting conviviality and sociability through its set of services (lounges, gym, study rooms). In Portugal, this kind of accommodation is beginning to appear, however it still constitutes a relatively small share of the market. With the growing number of students in higher education, together with the growth of international students studying in the country, there has been an increase in interest from international companies seeking to invest in the country and in this sector as seen through the number of pipeline projects in development. This thesis, therefore, aims to study the Portuguese student housing sub-industry, and how PBSA will influence / change the student accommodation market in Portugal, namely in Lisbon, and which disruptors are leading to this change.
- Equity valuation of Hugo Boss AGPublication . Soares, João Moreira; Assunção, António Luís Traça Borges deThis dissertation’s goal is to determine Hugo Boss’s fair share price and then issue a recommendation. The valuation process is based on macroeconomic information, industry outlooks, company business strategy and the company’s historical financial data. To define the share price, two different approaches were used - intrinsic and relative valuation. The methods chosen were the Discounted Cash Flow method (intrinsic valuation) and the multiples method (relative valuation). The share price reached through each method was 49,50€ and 38,35€, respectively. Both values combined allow the conclusion of 43,92€ as the fair value of Hugo Boss’s share price. Comparing the fair price calculated with its current market share price (35,10€) there is a 25% upside potential, which leads to a buy recommendation.
- (Un)Conventional monetary policy : how do negative policy rates affect banks?Publication . Barreiras, Joana Maria Raposo; Soares, Carla Sofia CaeiroIn June 2014, the ECB’s decision to cut its deposit facility rate (DFR) to -10 b.p. broke with the idea of an unsurpassable zero lower bound. At this level, people would convert deposits into cash to escape nominal devaluation. This new unconventional monetary policy’s impact on bank profitability is being extensively studied, without no full consensus being reached yet. We assess the Negative Interest Rate Policy (NIRP) effects on bank profitability, using a panel dataset of 143 Euro Area listed banks over the period from 2005 to 2019. This study employed a panel data linear regression analysis using relevant income components (Net Interest Income (NII), Net Non-interest Income (NNI), and Loan Losses Provisions (LLP) as a ratio to Total Assets) and the overall profitability (ROA) as measures of bank profitability. The results show a benign impact of NIRP on ROA, suggesting a lowering of LLP and an increase in NNI weighting a deteriorating effect on NII. Additionally, we show some evidence in favor of high-deposit banks being more vulnerable to the NIRP since they are reluctant to pass on these rates to retail depositors.
- Medidas de avaliação neuropsicológica das funções executivas em crianças do pré-escolar : revisão sistemáticaPublication . Colaço, Jéni Filipe; Rato, Joana MariaFundamentação teórica: As medidas de avaliação neuropsicológica das funções executivas (FE) em crianças com idade pré-escolar ainda estão pouco investigadas quando comparado com adultos. O estudo das FE tem gerado discordâncias entre autores, sendo que alguns apoiam as FE como um construto unitário, especialmente nas idades pré-escolares. Objetivos: Propõe-se conduzir uma revisão sistemática da literatura qualitativa para (a) identificar as medidas de FE construídas/estudadas para crianças de idade pré-escolar; (b) identificar o(s) componente(s) que as medidas de FE avaliam; (c) identificar medidas de FE com dados para a população portuguesa pré-escolar. Metodologia: A presente pesquisa bibliográfica recorreu a quatro bases de dados eletrónicas PubMed, ScienceDirect, Psycinfo e Scopus, tendo como descritores chave “Executive Functions”, “Preschoolers” e “Measures” para procurar estudos revistos por pares publicados nos últimos 15 anos. Resultados: Dos 39 estudos elegíveis para revisão, foram identificadas 87 medidas de avaliação de FE aplicadas em crianças de idade pré-escolar, na sua maioria oriundas da América do Norte e da Europa. Das medidas revistas, 10 foram utilizadas com maior frequência (nomeadamente, Dimensional Change Card Sort, Digit Span, Word span, Stroop Day/night, Go/no-go, Shape School, Head-Toes-Knees-Shoulders, Boy/Girl Stroop, Hanoi Tower e Bear/Dragon). Verifica-se que são poucos os estudos que avaliam um só componente, ainda assim, o componente mais estudado é o controlo inibitório. Dos estudos realizados em território nacional, foram encontrados quatro que fornecem dados de desempenho das FE da população pré-escolar portuguesa através da tradução/adaptação de medidas de avaliação. Discussão e conclusão: Verificou-se que nos últimos anos houve um grande crescimento no estudo de instrumentos de medida das FE em pré-escolares. Porém, o estudo destas medidas na população portuguesa ainda é muito recente e carece de investigação