Cesario Mateus - Academia.edu (original) (raw)

Papers by Cesario Mateus

This paper analyses the joint determination of capital structure and debt maturity of the firm fo... more This paper analyses the joint determination of capital structure and debt maturity of the firm for a large sample of countries from Latin America and Eastern Europe. To our knowledge this is the first time such study has been attempted for a multi-country emerging market sample. Employing dynamic panel data analysis, we test Barclay, Marx, and Smith Jr.'s (2003) model of joint capital structure and debt maturity determination using the Generalized Method of Moments on a system of structural equations. The empirical results support three main findings. First, capital structure and debt maturity are policy complements in Latin America and policy substitutes in Eastern Europe. Second, there is a substantial dynamic component in the determination of the endogenous variables that have been neglected by previous research.

5o Encontro Brasileiro de Finanças, 2005

SSRN Electronic Journal, 2000

ABSTRACT This research project aims to analyse the role of banks governance as an explanation to ... more ABSTRACT This research project aims to analyse the role of banks governance as an explanation to the recent financial crises. We claim to contribute to the current debate on the issue of governance mechanisms in explaining the performance of the banking sector, crucial to understanding of the 2007-2008 financial crises, in three important ways. Firstly, providing a unique and innovative analyse of the impact of board social and economic networks on bank performance, including political connections and business networks. Secondly, analysing the impact of deposit insurance on bank performance, considering both country and bank specific characteristics. Thirdly, analysing the banks’ characteristics that received government bailouts, namely in what concerns their corporate governance and try to shed more light on the extent to which banks’ governance characteristics determine the response to the financial crisis. The sample consists of 181 publicly listed banks from EMU countries, between 2002 and 2009 subject to the following criteria (1) being listed at least 1 year before year of analysis and (2) do no changed its governance structure due to mergers or acquisitions (M&A), in order to exclude banks than, eventually, around M&A have influenced stocks prices and/or manipulate results.

VIII ENCONTRO BRASILEIRO DE …, 2008

This paper investigates the determinants of capital structure for a sample of 20,713 unlisted fir... more This paper investigates the determinants of capital structure for a sample of 20,713 unlisted firms from 11 eastern European countries over the period 1994-2004. We employ usual firm-specific financial variables as well as country-specific variables that describe the degrees of governance structure and financial development of each country. Using regression analysis, our results indicate that firm ownership concentration and country governance structure are insignificant explanatory variables to the degree of leverage of the firms in our sample. On the other hand, indicators of country financial development are robust determinants of capital structure. However, the marginal explanatory power of country-specific variables is small. We conclude that firm-specific characteristics are decisive in capital structure.

We examine the trade credit linkages among firms within a supply chain to reckon the effect of su... more We examine the trade credit linkages among firms within a supply chain to reckon the effect of such linkages on the propagation of liquidity shocks from downstream to upstream firms. We choose a sample appropriate for this task, consisting of a large data set of Italian firms from the textile industry, a well known example of a comprehensive manufacturing cluster featuring a large number of small and specialized firms at each level of the supply chain.

Available at SSRN 1098347, 2008

The main sources of financing for small and medium sized enterprises (SMEs) are equity (internall... more The main sources of financing for small and medium sized enterprises (SMEs) are equity (internally generated cash), trade credit paid on time, long and short term bank credits, delayed payment on trade credit and other debt. The marginal costs of each financing instrument are driven by asymmetric information (cost of gathering and analysing information) and transactions costs associated with nonpayment (costs of collecting and selling collateral). According to the Pecking Order Theory, firms will choose the cheapest source in terms of cost. In the case of the static trade-off theory, firms choose finance so that the marginal costs across financing sources are all equal, thus an additional Euro of financing is obtained from all the sources whereas under the Pecking Order Theory the source is determined by how far down the Pecking Order the firm is presently located. In this paper, we argue that both of these theories miss the point that the marginal costs are dependent of the use of the funds, and the asset side of the balance sheet primarily determines the financing source for an additional Euro. An empirical analysis on a unique dataset of Portuguese SME's confirms that the composition of the asset side of the balance sheet has an impact of the type of financing used and the Pecking Order Theory and the traditional Static Trade-off theory are rejected.

Empirical Evidence from …, 2009

This paper examines if trade credit is as a substitute and/or a complement to bank credit in orde... more This paper examines if trade credit is as a substitute and/or a complement to bank credit in order to assess the existence of credit rationing. Using a panel dataset of 468 and 7019 Portuguese and Spanish small medium size enterprises for the period 1998-2006, and controlling for endogeneity problems by using GMM estimators, the results confirm the existence of credit rationing, since the substitution hypothesis is confirmed. This effect is particularly strong for firms that maintaining an exclusive relationship with one bank, which indicate a greater severity of adverse selection problems for those firms. Although the substitution hypothesis is confirmed, the results also indicate that the substitution and complementary hypothesis are not mutually exclusive, especially for a specific group of firms: the younger and smaller firms. In line with the theories that emphasize the informational role of trade credit, due the informative advantage of suppliers, our empirical results confirm that trade credit allow the younger and smaller firms to improve their reputation, as trade credit reveals the private information of the supplier to the bank, in turn, banks can update their beliefs about customer default risk and agree to increase bank credit.

5o Encontro Brasileiro de Finanças, 2005

European Financial Management Association 2007 …, 2007

The aim of this paper is to investigate the performance and persistence of 20 iShares MSCI countr... more The aim of this paper is to investigate the performance and persistence of 20 iShares MSCI country-specific exchange-traded funds (ETFs) in comparison with S&P 500 index over the period July 2001 to June 2006. There are several studies analysing mutual funds performance in past years, but very little is known about ETFs. In our analysis the Sharpe, Treynor and Sortino ratios are used as risk-adjusted performance measures. To evaluate performance persistence and therefore if there is any relationship among past performance and future performance, we apply to the Spearman Rank Correlation Coefficient and the Winner-loser Contingency Table. The main findings are at two levels. First, ETFs can beat the U.S. market index based on risk-adjusted performance measures. Second, there is evidence of ETFs performance persistence based on annual return. JEL Classification: G11, G15

This paper analyzes whether there is a magnify effect of twin crises on output and the relationsh... more This paper analyzes whether there is a magnify effect of twin crises on output and the relationship between banking and currency crises. Using data from 12 emerging countries over the period 1980-2006 we found that the cost of twin crises is large but it does not magnify the effect as compare to the combine cost of banking and a currency crisis happens at different time. In fact, the cost of twin crises was smaller when compare to the two crises with a difference between 2 to 2.6 percent using different methodologies. This result was also similar even with the exclusion of countries involved in the Asian Financial crisis as there was no evidence of the magnify effect on twin crises on GDP growth. JEL Classification: E44, F43, O16

European Journal of Finance, 2012

This paper tests for pecking order behavior in medium-sized private Portuguese firms. In contrast... more This paper tests for pecking order behavior in medium-sized private Portuguese firms. In contrast to the usual split between internal funds, debt, and external equity, we separate debt into four components – cheap trade credits (CTC), bank loans (BL), other loans, and expensive credits (EC). We use breakpoint tests to identify when firms switch between funding sources by examining the change in each funding source based on the financing deficit remaining after the previous pecking order funding source has been used. Our tests indicate that Portuguese companies generally move from lower cost to higher cost financing sources, but they do not exhaust each type of debt before moving on to the next funding source in the pecking order. Such behavior is consistent with a loose interpretation of pecking order financing, but not a strict interpretation of the theory. Instead, Portuguese firms may be balancing pecking order financing with a need to maintain some degree of financing flexibility.

Aarhus School of Business, Finance Research …, 2006

This paper analyzes the capital structure decision of non-listed bank-financed firms using a rich... more This paper analyzes the capital structure decision of non-listed bank-financed firms using a rich and unique new data set of Portuguese firms. These firms are rarely studied in capital structure contexts and differ from large listed firms in terms of agency and asymmetric information problems and funding sources. It is argued that the solution of agency and asymmetric information problems for large firms shows up on the balance sheet (as restrictions on debt) whereas for small firms these problems are solved by financial institutions and are therefore less apparent on the balance sheet. This makes it easier for small firms to exploit tax advantages of debt. The empirical analysis shows that debt tax shields and provisions for tax loss carry-forwards have an important impact on the capital structure of small firms. It is also found that the balance sheet variables used for large listed firms in different countries to model agency costs and asymmetric information do not work well for small non-listed firms. The only significant variables (besides tax variables) for small firms are bankruptcy (collateral) variables. This paper analyzes the capital structure decision of non-listed bank-financed firms using a rich and unique new data set of Portuguese firms. These firms are rarely studied in capital structure contexts and differ from large listed firms in terms of agency and asymmetric information problems and funding sources. It is argued that the solution of agency and asymmetric information problems for large firms shows up on the balance sheet (as restrictions on debt) whereas for small firms these problems are solved by financial institutions and are therefore less apparent on the balance sheet. This makes it easier for small firms to exploit tax advantages of debt. The empirical analysis shows that debt tax shields and provisions for tax loss carry-forwards have an important impact on the capital structure of small firms. It is also found that the balance sheet variables used for large listed firms in different countries to model agency costs and asymmetric information do not work well for small non-listed firms. The only significant variables (besides tax variables) for small firms are bankruptcy (collateral) variables.

Available at SSRN 1098370, 2007

This paper investigates the capital structure choices for a sample of 19,752 unlisted firms for t... more This paper investigates the capital structure choices for a sample of 19,752 unlisted firms for the period 1994-2004 using a rich data set of unlisted Western European firms.

SSRN Electronic Journal, 2003

This paper analyzes the impact of corporate taxes on the capital structure in a country where ban... more This paper analyzes the impact of corporate taxes on the capital structure in a country where bank financing is the main external financing source. It is found that the existence of a debt tax shield and provisions for tax loss carry-forwards has an important impact on the capital structure of the firm. These results adds to the evidence that taxes matters for the capital structure decision. The main differences between the results in this paper and the existing literature are that these results are obtained from 1) a bank based financing system where asymmetric information and agency problems are solved differently than under a market-based system and 2) the results are obtained from small and medium sized unlisted firms.

5o Encontro Brasileiro de Finanças, 2005

SSRN Electronic Journal, 2000

VIII ENCONTRO BRASILEIRO DE …, 2008

Available at SSRN 1098347, 2008

Empirical Evidence from …, 2009

5o Encontro Brasileiro de Finanças, 2005

European Financial Management Association 2007 …, 2007

European Journal of Finance, 2012

Aarhus School of Business, Finance Research …, 2006

Available at SSRN 1098370, 2007

SSRN Electronic Journal, 2003