This time is different: Behavioural aspects of financial crises

In “This Time is Different: Behavioural Aspects of Financial Crises,” Brandes Institute Advisory Board member Bruce Grantier reviews the book This Time is Different: Eight Centuries of Financial Folly.  With this review, Grantier provides a reminder to investors of the frequency and nature of financial crises and the importance of adhering to enduring investment principles.

Casos de relaciones públicas y comunicación corporativa

"Casos de Relaciones Públicas y Comunicación Corporativa" viene a cubrir un vacío no solo en la bibliografía española, sino también en la internacional. Si bien es cierto que en la bibliografía anglosajona sobre relaciones públicas existen diversos libros que compilan casos reales para ser estudiados y debatidos en las aulas universitarias –un tipo de libro hasta ahora ausente en la bibliografía española–, en cambio no existen textos que presenten una selección de casos para que los estudiantes los resuelvan de acuerdo con las pautas del planteamiento estratégico de las relaciones públicas y la comunicación corporativa.

Jordi Xifra y Ferran Lalueza

La emergencia de los social media en la comunicación empresarial

La aparición de Internet ha supuesto un cambio vertiginoso en la comunicación y a la vez en el modo de relacionarse las personas, tanto en su aspecto personal como en su faceta laboral. A partir de su incorporación en nuestras vidas, se han ido generando diferentes herramientas de comunicación e intercambio de información que poco a poco han ido transformando el panorama actual produciendo un nuevo sistema comunicativo, integrado por la convergencia entre la industria de la comunicación y la cultura de masas, con la informática, las telecomunicaciones de uso cotidiano y la industria del conocimiento.

Dra Estela Bernad

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Investing for grown ups? Value Investing

Who is a value investor? 

The simplistic definition: The lazy definition (used by services to classifyinvestors into growth and value investors) is that anyone who invests in lowPE stocks is a value investor. 

The too broad definition: Another widely used definition of value investorssuggests that they are investors interested in buying stocks for less that whatthey are worth. But that is too broad a definition since you could potentiallycategorize most active investors as value investors on this basis. After all,growth investors also want to buy stocks for less than what they are worth. 

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Dos sentencias con tremendos errores sobre valoración

Este breve documento contiene más de 30 errores en la valoración de una empresa: la mayoría están más relacionados con la ausencia de sensatez que con la técnica.

Pablo Fernández
Profesor de finanzas del IESE

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Causes of corruption in European Countries: History, law, and political stability

This study asks why corruption is increasing in European countries and what are the most important factors that explain such corruption? Although corruption scandals, speeches and reports indicate that corruption persists in European countries no one has tested the causes of corruption in European countries and this study is, to the best of our knowledge, the first to empirically examine the causes of corruption for European countries. Cross-country data for European countries is used to examine the role of legal influences, historical factors and the effect of political stability on corruption. Five key findings are: (1) the effects of the legal strengths on the incidence of corruption are significant with a negative sign - a one-standard-deviation increase in the legal strengths is associated with a decrease in corruption of 0.26 points, 26% of a standard deviation in the corruption index; (2) political stability is a significant determinant of corruption; (3) the interactive effects of history and law are important in reducing corruption levels; (4) the size of government matters in affecting corruption levels; (5) finally, this study shows that an interdisciplinary approach is the most appropriate way to explain corruption.

La estrategia de marketing con causa: Factores determinantes de su éxito

Las iniciativas de marketing con causa se han convertido en una estrategia frecuente para mejorar la imagen de las compañías y aumentar las ventas, atrayendo al consumidor a través de la colaboración con fines sociales. Este estudio analiza los factores que influyen en el éxito de esta estrategia. Los resultados muestran que las empresas deberían elegir causas vinculadas con su actividad principal y con las que el consumidor se sienta implicado. Además, es importante que el consumidor atribuya motivaciones altruistas a estas iniciativas.

Universia Business Review

Isabel Buil, Iguácel Melero y Teresa Montaner

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Contrarian Investment Strategies: An Assessment of the Value Premium in context to Recessions

Contrarian investment strategies have been present for decades, generating superior returns for the investors. Investors who follow the contrarian investment strategy are known as value investors. Value investors follow a strategy where stocks with low prices relative to book value and other measures of fundamental value are bought, to be able to generate abnormal returns.

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Focus India: Economic slowdown. Companies hampered by slow pace of reform

The Indian economic engine is sputtering but continues to run: it suffers from persistent bottlenecks that the country and its companies have to contend in order to grow. Growth was only 5.3% in Q2 2012, its lowest level in nine years. Nonetheless, the effective implementation of reforms, which could open the country to a new cycle of vigorous growth, remains uncertain in view of political paralysis, making companies the potential collateral victims of these gridlocks.

The Coface economic publications

"Focus India" By Nina Delhomme and Constance Boublil (18 October 2012)

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El mercader de Venecia

La burbuja inmobiliaria en España se remonta a la década de los 90, con la rápida generación de enormes excedentes de liquidez en ciertos países antes del euro y su posterior y súbito engullimiento por parte de colectivos de otros países europeos, siempre con lo inmobiliario como telón de fondo. Es obvio que no se resolverá tal problema arañando a los engullidores sus rentas de trabajo de toda la vida bajo amenaza de recortes, para rehacer con ellas los excedentes de los generadores.

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Global Economic Prospects, January 2013: Assuring Growth Over the Medium Term

Según el informe Global Economic Prospects: Assuring Growth Over the Medium Term, publicado recientemente por el World Bank (WB), la situación económica mundial sigue siendo frágil y proclive a más decepciones, aunque el balance de los riesgos está ahora menos cargado hacia el lado negativo de lo que había estado en años anteriores.

 

El informe estima que el crecimiento mundial alcance una cifra relativamente débil de 2,3% y 2,4% en 2012 y 2013, respectivamente, y que se fortalezca gradualmente a 3,1% y 3,3% en 2014 y 2015. Ligeramente desviado de las previsiones que hizo el año pasado del 2,5% y 3,1% en 2012 y 2013, respectivamente.

Para retomar el nivel de crecimiento previo a la crisis, recomienda que los países en desarrollo una vez más deben poner énfasis en políticas de fomento de la productividad interna. Y si bien las naciones de ingreso alto continuarán enfrentando problemas debido a la reestructuración y la consolidación fiscal, la situación debería aligerarse levemente para permitir una lenta aceleración del crecimiento en los próximos años.

The Ascent of Autonomous Nations. The institutional advantages of being an EU member state

Many people will empathise with Antoine, the main protagonist in Sartre’s seminal work Nausea. What once felt normal and mundane can start to feel distinctly unusual. Existentially, our surroundings can start to appear differently to us and our perception changes. This can take place not only in the individual but also collectively; and collectively people’s perceptions of Europe appear to be changing.
 

The nation states of old are already losing sway to forces such as globalisation but, in antithesis to this, Europe is becoming more hyperlocal, with a new emphasis on cultures that we now realise that we must not lose. These conditions have led to a new drive to reinstate the historic nations of Europe, who had lost their ability to express themselves and to make decisions for themselves. Hence, the British are ever more strongly becoming the Welsh, the Scottish, the English and the Irish; the Belgians are increasingly the Flemish and Walloons, the Spaniard is replaced by the Basque, the Catalan and the Galician, and yet all within the wider concept of being European.

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"España debe salvarse a sí misma" por Ángel Pascual-Ramsay

Tras dos décadas de fondos europeos, España no ha construido un modelo productivo. El problema es la falta de dinamismo de nuestra economía y no la ausencia de estímulo, que apenas generaría crecimiento.

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The Coface economic publications: Panorama Switzerland

Investors have made it one of their favourite havens during this period of recurrent crises, from global finance to sovereign debt in the eurozone. Proverbial political stability, sound management of public finances, a complex but attractive tax system, many very innovative small businesses and a flexible labour market. Not forgetting, of course, a renowned financial market, making it a major player on the international scene in wealth management activities. These are strengths which sometimes turn into weaknesses.

A very open economy, the Confederation has been faced with a sharp rise in the Swiss franc that only a bold pegging to the euro has been able to curb. Exporters have therefore been able to limit the damage, while reducing their costs and margins. But property has entered a dangerous area and although they are not inevitable, bubble risks cannot be excluded. Even though experts consider that the Swiss franc is still overvalued.

For banks, the main cog of the Swiss economy, times are less straightforward than in the past. The planned disappearance of banking secrecy, new international regulations, lower margins and increased risks of mortgage lending are all challenges. Highly concentrated between UBS and Crédit Suisse, the sector still represents 5 times the national wealth. It was 6.6 times the GDP in 2007.

And despite a strong presence abroad, a refocusing on the domestic market has taken place: assets realized within the Confederation have increased by 20% since 2007.

Nevertheless, this small highly competitive market where the consumer is demanding, with a high purchasing power, remains a test for export candidates. If they can play the quality and precision card to gain the trust of their partners, given a strong tradition of confidentiality, their margins could be substantial. And the country should gradually return to growth after a meagre increase of some 0.7% of GDP in 2012, thanks to increased household consumption.

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Boosting Competitiveness to Grow Out of Debt. Can Ireland Find a Way Back to Its Future?

This paper investigates the prospects for Ireland to grow its economy against the backdrop of high indebtedness. The paper uses vector autoregressive analysis to explore the interlinkages among competitiveness, exports, economic growth, and fiscal performance. The emerging conclusion is that Ireland, which has regained cost competitiveness following the crisis-driven fall in domestic prices, is poised to return to its path of strong exports and economic growth and lower imbalances provided that it maintains competitiveness, though a pickup in external demand is critical. Three main findings underpin this conclusion. First, external demand is an important driver of exports and also the single most important determinant of Ireland’s GDP and government revenue. Second, declines in price competitiveness, featured by real effective exchange rate (REER) appreciations, restrain exports and economic growth. Third, exports boost output, which in turn enhances fiscal performance.

Rebuilding Europe’s Competitiveness

This Report on Rebuilding Europe’s Competitiveness is published at a critical time for Europe, as the region struggles to emerge from one of its most difficult periods since World War II. Recent years have seen stagnating economic growth, rising unemployment leading to social tensions, and sovereign debt crises in several European countries, exacerbated by the fact that the future outlook remains uncertain. There is widespread agreement that the root causes of this prolonged crisis lie in the lack of competitiveness of many countries.

Over the past half-decade, the region has focused its efforts on addressing the most immediate challenges associated with the financial crisis and preventing the disintegration of the Eurozone. However, more recently Europe has started to implement deeper reforms to rebuild competitiveness, paving the way towards a more sustainable path of prosperity. More precisely, several European countries have adopted important reforms aimed at enhancing competitiveness such as measures to make public finance more sustainable, the banking system more reliable and efficient, mend dual labor markets, and increase the efficiency of product markets. Consequent and sustained implementation of these measures will be required in order to ensure their full impact. In this context, galvanizing the support of all stakeholders within society is critical for success.