ORCID Profile
0000-0002-9266-4220
Current Organisation
Fundação Getulio Vargas
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Publisher: ABRACICON: Academia Brasileira de Ciencias Contabeis
Date: 31-03-2020
DOI: 10.17524/REPEC.V14I1.2041
Abstract: Objective: The inventory management faces a trade-off which affects firms in the relationship between whether maintaining high inventories and decreasing the probability of stock-outs or keeping inventory levels lower and applying the excess cash to other investments. Thus, this paper investigates the relationship between inventory management and performance. Method: The s le is comprised of non-financial Brazilian firms listed in the BM& FBovespa from 2010 to 2016, and due to inventory is not to be a relevant factor in the revenues of all the firms of the initial s le, it was applied a procedure to refine the s le through a simple linear regression to only comprise firms with a significant relationship between inventory and sales. To test the assumptions declared by the study, we used a quantitative approach based in a regression analysis. Results: The results indicate that the model which considers value added measurement of performance shows that there is no relationship between inventory and performance. However, a robustness check was done using the ROA to measure the performance and, in this scenario, there was a statistically inverted U-shaped relation between the profitability, the net trade cycle and its square. This means that a non-linear relationship between the variables were found, which follows the idea of an optimal level of inventory and performance. Contributions: To the best of the author’s knowledge, this is the first study that investigates an inflection point between inventory management and performance in Brazilian firms. The findings have relevant practical guidelines to the Brazilian firms and researchers in the analysis of the performance related to the net trade cycle, which it can be suggested that the Brazilian shareholders are not concerned about internal factors, as the inventory management, but if the firm is being managed profitable.
Publisher: Emerald
Date: 02-12-2019
Abstract: This paper aims to examine the Brazilian stock market behavior and volatility term structure of two portfolios that, theoretically, the companies that comprise them have different degrees of idiosyncratic risk: one portfolio consists of firms with good corporate governance and the other comprises firms with poor corporate governance. The s le comprises corporate firms listed in the Brazilian stock market during the period from January 2008 to December 2017. Generalized autoregressive conditional heteroskedasticity models were applied. The results show that the portfolio of firms with good corporate governance practices presents fluctuations that are more often temporary and reactive, with trends’ persistence of shorter durations, when considering the punctual volatility of the parameters estimated. This opposed expectation that the portfolio comprised of companies with good governance practices are better protected from short-term movements. However, over time and with standard error measures in consideration, both portfolios’ volatilities behave in similar ways. These findings may be related to Brazilian market characteristics, such as ownership concentration, ineffective corporate boards and the ever-developing nature of the stock market in Brazil. Any one of these characteristics present challenges to effective enforcement of the corporate governance practices in the Brazilian context. The findings are potentially to the interest of researchers and practitioners for several reasons. First, this paper contributes to the growing literature on the relationship between corporate governance and market volatility. Second, it informs that volatility in the Brazilian context is likely only partially, if at all, influenced by corporate governance practices. Third, longitudinally, both indices follow the same pattern and converge to the same place.
Location: Brazil
No related grants have been discovered for Guilherme Freitas Cardoso.