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- Certification of Portuguese companies as an inducer of profitability: A panel data approachPublication . Dos Santos, Anabela Saraiva; Pinto, António; Manuel Nogueira Reis, Pedro; Neves, M. ElisabeteWith the globalization and internationalization of markets, companies need to be more competitive and offer high-quality guarantees to consumers, suppliers, banking institutions, and shareholders. Thus, the objective of this paper is to measure the impacts that these guarantees, analyzed through quality management, environmental management, and management of occupational health and safety standards, will have on the return on assets (ROA) of companies classified by sector of activity, considering each of the certifications individually and as a whole. The panel data approach methodology was used for 10 years in Portuguese- certified companies between 2010 and 2019. The Chow test, the Breusch-Pagan, and the Hausman test were applied to identify a more feasible model between the pooled OLS and the random or fixed effects model. Furthermore, the cluster-robust standard errors model was applied. The results show the existence of synergies when adopting more than one certification to improve firm performance. Moreover, the single certification estimate by sector results are significant and can be positive drivers of profitability, but only for companies in the manufacturing industries related to natural resources. However, they trigger negative results in the accommodation, catering, and information and communication sectors.
- How Do Banking Characteristics Influence Companies Debt Features and Performance during COVID-19? A Study of Portuguese FirmsPublication . Reis, Pedro; Pinto, AntónioAbstract: This paper investigates how bank characteristics (market share, principal shareholders, profitability, and size), and the gender of the company’s board members, along with their supervisory abilities, influence the firm’s performance, cost of debt, and leverage. We extracted relevant data from a sample of nearly 18,300 Portuguese companies in 2020 (the pandemic year) to build our model with all the main explanatory variables; then, through the least absolute shrinkage and selection operator estimation, we reduced the variables. The robust ordinary least-squares standard-errors approach was applied by company size. Our findings allowed us to observe the crucial negative role of multiple bank relations, but only on the returns of small companies. A decrease in bank relations led to an increase in debt cost and reduced leverage across larger companies. Profitable banks generate higher company returns, mainly for small companies. Furthermore, the better-informed bank shareholders (management, institutional, or government) persuaded the banks to charge higher interest rates, resulting in a higher leverage ratio for companies of average size. Female board members tended to vote for lower debt ratios due to greater risk aversion, while the opposite was true of male board members. The supervisory capacity of the board in the area of bank relations showed a more substantial link with the increased financing costs of small companies. In brief, bank characteristics and board gender were strongly associated with the financial aggregates of companies relative to their size. This work contributes to the literature by using new bank characteristics and an original variable representing board ability to cope with bank relations. To the best of our knowledge, this is the first study to determine the association of the above characteristics in the Portuguese market relative to company size, and their impact on profitability, cost of debt, and leverage. The company board and banking systems should evaluate the impact of their decisions on corporate activity and make necessary adjustments.
- The effect of incubation on business performance: A comparative study in the Centro region of PortugalPublication . Almeida, Rita; Pinto, António; Henriques, CarlaPurpose – The role that incubators play in business performance is a topic that has been discussed in the literature. They help to create the necessary conditions for the development of entrepreneurship and business innovation, but studies on their real contribution are lacking, especially in contexts such as the Portuguese one. Business incubators have been strong drivers of entrepreneurship and innovation. The main objective of this study is to assess whether business incubation offers benefits to incubated companies compared to non-incubated ones, particularly in terms of performance. Design/methodology/approach Data were collected from incubated and nonincubated companies in the central region of Portugal. These two groups of companies (incubated and non-incubated) were initially compared using the t-test and the Mann-Whitney test. Then, using linear regression models, the impact of incubation on performance variables was estimated, adjusting for the effect of control variables, when significant. Findings The results suggest that in the first years of life, incubated companies present a higher level of performance than non-incubated ones, an effect that decreases as companies become more mature. Originality/value – The study contributes to deepening the understanding of the role that business incubators play, providing further evidence that in their early life incubated companies outperform non-incubated ones.
- Corporate ownership concentration drivers in a context dominated by private SME'sPublication . Reis, Pedro; Pinto, AntónioThis paper aims to ascertain how company-specific factors influence the corporate ownership concentration of Portuguese firms. The paper employs several different regression techniques: Generalized Linear Model, Ordered Logit, 2 Stage Least Squares, Ordinary Least Squares, Truncated and Constrained regression. Additionally, to test the model's prediction power, it conducts an in and out-of-sample analysis and used joint-rolling window re- gressions and dependent variables intervals partition to test the robustness of the model under different sample restrictions. Firm size, profitability, the number of subsidiaries, and bank concentration are positive determinants of ownership concentration, while an opposite influence is found concerning auditor qualification and the board of directors' size. Significant implications are provided for the policymaking in countries where capital markets are underdeveloped, and concentrated ownership is common to help the regulator determining the power of controlling shareholders. This study enriches the literature on the determinants of corporate ownership, being the first study to approach non-public companies. It adds novelty by incorporating new company factors which are scarce in ownership studies.