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- Bank Market Power, Firm Performance, Financing Costs and Capital StructurePublication . Gonçalves, Marisa Pessoa; Reis, Pedro; Pinto, PedroIn this study, we provide a thorough analysis, conducted on a company-by-company basis, of the impact of bank concentration and the bank-relative power of banks on firm profitability, financing costs, and capital structure in a small economy like Portugal. Using a sample of 434,990 Portuguese companies, the study spans a time frame of 13 years (from 2006 to 2018). Principal component analysis (PCA) was used to determine bank concentration, and a new variable, “bank-related power”,was introduced. This work employed linear regression with static panel data for fixed and pooled effects, using Driscoll–Kraay standard errors and robust standard error estimation. A direct associ ation was found between business performance and the use of bank credit in highly concentrated banking markets (SMEs), and there is evidence of an inverse relationship when the relative power of banks increases (small business). Evidence also shows that financing costs increase with greater bank concentration, while firms’ capital structure improves under similar conditions. When a bank holds greater relative market power, it tends to exert a negative impact on the capital structure of large companies. However, an inverse relationship is observed in the case of SMEs. Unlike previous studies, the article assesses the effects of bank market power on each of the different companies involved by using both bank concentration (as a composite variable) and a new variable that measures the relative power of banks. Due to its extensive database and expanded time frame, this research is innovative in the context of small-sized companies.
- Bank Credit and Trade Credit: The Case of Portuguese SMEs from 2010 to 2019Publication . Pinto, Pedro; Henriques, Carla; Cardoso, Carolina Esteves Oliveira da Silva; Neves, Maria Elisabete DuarteSmall companies face significant difficulties in accessing finance, and the use of bank credit and trade credit are the primary sources of financing, specifically in small countries, with little market liquidity, and focused on the banking system, as is the case of Portugal. The main objective of this article is to identify significant drivers of bank and trade credit, as well as investigate the complementary or substitutive relationship between them, considering that both constitute an essential source of financing for small and medium-sized enterprises (SMEs). The sample comprises 5860 companies, and the analysis was performed using panel data methodology (2010–2019). The results suggest that, during the period in which the financial crisis was most felt in the country (2010–2013), companies intensified their demand for trade credit, and in the following years for bank credit. Our evidence does support the substitution hypothesis between trade and bank credit.
- Unlocking portfolio resilient and persistent risk: A holistic approach to unveiling potential groundsPublication . Reis, Pedro; Pinto, PedroPurpose: This study identifies residual, persistent, or resilient risks that remain even after controls for systematic and sentiment risk and extensive portfolio diversification are applied. Method: This methodology employs the Newey-West regression analysis in conjunction with the Lagrange multiplier method to construct a global minimum variance portfolio. This analysis focuses explicitly on the diversifiable risk component. It uses two benchmarks, the Wilshire 5000 and S&P500, in collaboration with investor sentiment metrics. Its primary objective is to mitigate systematic and idiosyncratic risk by examining three different portfolios (Tourism, Utilities/Energy, and Industrials) comprising 132 individual stocks observed over a span of 17 years. Findings: This study identifies a persistent and resilient residual risk that may be connected to undisclosed uncertainties and emerging risks that are known to exist but are not yet fully materialized. These include potential ramifications from emerging widespread climate disasters, the duration of the recession periods, the effect of uncertainty on merger and acquisition outcomes, and even unknown threats such as the proliferation of new computer viruses and system vulnerabilities, the repercussions of unregulated artificial intelligence, and shifts in individual preferences, beliefs, and behaviours that may influence both investors and society’s economic dynamics. All these risks and uncertainties will greatly contribute to a fear of the unknown and subsequently affect financial markets. Novelty: In this study, we extract the systematic and investor sentiment risks for individual socks and construct annual minimum variance portfolios. Our next step was to justify the presence of unknown, persistent, resilient, or residual risk factors. Practical implications: This particular approach provides multiple advantages to investors and regulators. It enables them to construct portfolios with lower levels of risk and proactively mitigate potential sources of risk that are presently little more than possibilities but may evolve into real threats.
- Os determinantes da satisfação dos clientes nos serviços de restauração. Um estudo de casoPublication . Antunes, Joaquim; Barroco, Cristina; Pinto, PedroA avaliação da satisfação do cliente faz parte integrante das preocupações dos gestores. O ECSI (Índice Europeu de Satisfação do Cliente) constitui um dos principais indicadores utilizados em diferentes países para estudar a satisfação do cliente em diversos setores de atividade. Em Portugal, foram analisados 18 setores de atividade com recurso a esta metodologia. No entanto, nenhum deles incidiu sobre a área da restauração, pelo que será importante avaliar o modo como o nível de satisfação do cliente constitui um indutor para a gestão deste setor de atividade, tão relevante na economia portuguesa. Assim, o principal objetivo deste estudo é identificar os fatores determinantes da satisfação dos clientes no setor da restauração. O estudo teve por base o ECSI (índice europeu de satisfação do cliente). Portugal também adotou este modelo criando o ECSI Portugal. Este modelo integra a satisfação do cliente como objetivo central na gestão das organizações, facultando-lhes instrumentos de atuação neste domínio e defende também os interesses dos consumidores, dando-lhes a oportunidade de avaliarem e serem ouvidos nos processos de melhoria da qualidade. A metodologia teve por base um inquérito efetuado a uma amostra de 75 clientes, em que se procurou perceber os atributos que os clientes mais valorizam num empreendimento de restauração na cidade de Viseu (Portugal). O inquérito incluía 21 itens relacionados com a satisfação e fidelização dos clientes, avaliados numa escala de likert de 1 a 10. Os resultados mostram que os atributos mais valorizados são a simpatia do staff, a localização e a decoração/design do espaço. Foi realizada uma análise fatorial através do método de rotação varimax, com normalização de Kaiser, aos itens da satisfação, em que que o fator mais valorizado está relacionado com a qualidade e imagem do empreendimento, seguido do fator fidelização e recomendação, do fator resolução de reclamações e, por último, o fator sensibilidade ao preço, como o menos valorizado. Estes fatores deverão ser tidos em conta nas futuras decisões do gestor, preocupado em aumentar o nível de satisfação e fidelização dos clientes. Estes resultados poderão também servir como exemplos para outros estabelecimentos do mesmo tipo de atividade.