The objective of this article is to analyze the pre-existing studies that investigate the link between the circular economy and financial aspects in order to understand the evolution of the circular economy literature and its relationship with finance. In addition, it proposes an investigation of empirical evidence of economic-financial gains resulting from the adoption of circular production practices. The methodology used to achieve this goal was a systematic review of the literature and bibliometric analysis. Thus, it was possible to conclude that the barriers faced by companies adopting the circular economy in relation to financial performance are defined by (i) the size of the business and the initial investment cost, (ii) difficulties for micro and small companies, (iii) to a more complex structuring of the business, and (iv) greater exposure to risk, as the circular economy is a new concept and is and not as representative as a linear standard system. The results show that few studies investigate corporate gains from circular production, which is, therefore, an important topic for future research and the major contribution of this paper.

This study aims to investigate the factors that affect the market exit of Brazilian singular credit unions from 1995 to 2009; it also identifies and lists the determinants of various types of market exits and analyzes whether profitability is a significant factor for credit union survival. This study was conducted with accounting data provided by the Central Bank of Brazil, which derives only from individual cooperatives, i.e. singular credit unions. Quarterly financial statements from these credit unions that were active from 1995 to the second quarter of 2009 were employed, totaling 71,325 observations for 1,929 credit unions. Based on survival and the model of competing risks (such as the Cox, Exponential, Weibull, Gompertz, and Competing Risk models), the results show that there is no statistical evidence to ensure a correlation between profitability and credit union survival. The results also suggest that the size of credit unions plays a key role in their survival and longevity and that their funding and investment management are related to their survival and risk of market exit. In conclusion, the results confirm the initial idea that the duality inherent to credit unions - cooperative principles versus economic efficiency - might influence the stability, survival, and longevity of these institutions. Such results may also imply that a credit union embracing the rationale of a private bank will become more estranged from its members, something which will hinder its future operations and increase the likelihood of its exit from the market.

Earnings quality, investment decisions, and financial constraint

This paper investigates the efficiency of traditional portfolio optimization models when the returns of financial assets are highly volatile, e.g., in financial crises periods. We also develop alternative optimization models that combine the mean absolute deviation (MAD) and the conditional value at risk (CVaR), attempting to mitigate inefficient, low return and/or high-risk, portfolios. Three methodologies for estimating the probability of the asset’s historical returns are also compared. By using historical data on the Brazilian stock market between 2004 and 2013, we analyze the efficiency of the proposed approaches. Our results show that the traditional models provide portfolios with higher returns, but our propose model are able to generate lower risk portfolios, which might be more attractive in volatile markets. In addition, we find that models that do not use equiprobable scenarios produce better results in terms of return and risk.

Este estudo tem como objetivo analisar o impacto da qualidade das informações contábeis no custo de capital das empresas brasileiras de capital aberto. Para isso, foram coletados dados das demonstrações financeiras de 325 empresas no período de 2010 a 2020, totalizando 2.293 observações. Utilizando um modelo de regressão com dados em painel, foi possível identificar que a qualidade das informações contábeis exerce influência significativa no custo de capital das empresas brasileiras. Os resultados indicam uma relação entre o gerenciamento de resultados e a redução do custo de capital de terceiros, enquanto a piora na qualidade dos lucros está positivamente relacionada ao aumento do custo de capital próprio. Além disso, o estudo apresenta indícios de que fatores como endividamento e tamanho das empresas influenciam positivamente o custo de capital, enquanto a tangibilidade e a rentabilidade sobre ativos e patrimônio estão negativamente relacionados ao custo de capital.

EARNINGS QUALITY ATTRIBUTES AND INVESTMENT OPPORTUNITIES FOR LATIN AMERICAN FIRMS