Impact of IFRS on the quality of financial information in the United Kingdom and France: Evidence from a new perspective

Financial institutions' scale of total and non-performing loans are important figures signaling economic activity and its risk level. COVID-19 created an external shock with overarching effects on the global economy, impacting the credit activity and debtors' ability to repay their obligations. We study how Colombia's loans and non-performing loans market ratios could react to an external shock (absent of any relief measures) by developing a vector autoregressive model with exogenous variables (VARX) with the Central Bank intervention rate as an exogenous variable. We use impulse response functions to simulate the impact of the COVID-19 pandemic on the market of loans and default levels in Colombia. Our results show that the effects remain significant over long periods.

Este documento tiene como objetivo la estructuración de un marco de análisis para el estudio de prácticas de gobierno corporativo y su incidencia en los resultados financieros, teniendo en cuenta estudios teóricos y empíricos en países desarrollados y en desarrollo, principalmente latinoamericanos, con énfasis en Colombia. Las prácticas de gobierno corporativo se han convertido en un elemento esencial de los estudios de la teoría de la firma en vista de que proveen a los gestores y propietarios de mecanismos que permiten establecer normas encaminadas a la minimización de conflictos de interés, la consecuente mejora y transparencia en la toma de decisiones y, por ende, elevar los niveles de desempeño financiero. A partir de la metodología de análisis documental propuesta por David Papineau, se encuentran una significativa evolución y convergencia en la normativa internacional y nacional en lo relacionado con prácticas de gobierno corporativo y su relación con el desempeño; resalta el incipiente impacto en Colombia y otros países en desarrollo. Entre los resultados más relevantes están la necesidad de abordar las prácticas de gobierno corporativo y su impacto sobre los retornos financieros de las firmas desde un enfoque multiteórico, al igual que la identificación del problema que para las investigaciones empíricas representa la endogeneidad entre el desempeño financiero y el gobierno corporativo.

In this paper, we study the relationship between the merit order effect and the ownership structure of renewable resources in electricity markets. We use daily frequency data from the Colombian electricity market in 2012-2019 and designed a strategy to estimate the spot price's dependence on renewable energy. We study how the participation of multi-technology firms in renewable energy alters the spot price. Our main results show a merit order effect for the Colombian electricity market, but this weakens in the presence of greater participation of multi-technology firms in the total availability of renewable energy for the day.

When calculating Tax Savings, TS we are confronted with a strange mix of accounting accrual and market value when involving TS in the calculation of the Weighted Average Cost of Capital, WACC or the Cost of Equity, Ke. Firms earn the right to TS once they accrue the interest expense and they actually earn the TS when taxes are paid. Tax savings and the discount rate we use to calculate their value are involved in the calculation of WACC and Ke. Textbook WACC formulation is a very special and unique case that is not typical. Based on previous findings, we derive a general approach to those formulas that take into account any kind of TS related to the financing decision of a firm and any date when the TS is earned. These formulations can be used to introduce any type of externality that creates value through tax savings not captured by neither the cost of debt nor the cost of equity. In this paper we develop the formulations for Ke, the cost of levered equity and the average cost of capital when dividends, interest on equity or monetary correction of equity are deductible. This is the case of Brazil. We show that using the proper formulation the most known valuation methods, i) Firm value with Free Cash Flow and WACC for the FCF; ii) value with the Capital Cash Flow and WACC for the FCC; iii) equity value with the Cash Flow to Equity and Ke, the levered cost of equity plus debt; iv) Adjusted Present Value, APV are consistent and give identical results.

This paper studies the relationship between ownership concentration, family ownership, management, and market and accounting performance for 59 industrial firms listed in the Lima Stock Exchange during the period of 1999 to 2005. An inverted U-shaped relationship was found between ownership concentration and market performance in both family and non-family firms, pointing out an entrenchment effect or excessive risk aversion of the controlling group. This effect is worsened for family firms. The presence of family members as CEOs, Chairmen and Board Members is also negative for a firm’s performance and family ownership was found to increase the leverage of a firm.