The user cost of capital and corporate investment in the Latin American economies: a novel approach

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dc.authoridDoruk, Omer Tugsal/0000-0002-2382-1042
dc.contributor.authorDoruk, Omer Tugsal
dc.date.accessioned2025-01-06T17:37:13Z
dc.date.available2025-01-06T17:37:13Z
dc.date.issued2023
dc.description.abstractPurposeIn the current study, corporate investment is examined by using a user cost of capital model for two important Latin American economies: Brazil and Mexico. In this paper, a dynamic user cost of capital model is employed. The extended model also accounts the investment model with the convex adjustment cost. Moreover, the link between structural change, financial liberalization and investment is also investigated. The present study, therefore, sheds new lights on the investment behavior of the Latin American emerging markets.Design/methodology/approachThe differenced generalized method of moments approach is employed to control the endogeneity, heteroscedasticity and autocorrelation for modeling the corporate investment over 20 years for both countries.Findings The findings indicate that the dynamic user cost of capital-based investment model explains the corporate investment in Brazil and Mexico. Especially, the interest rate and depreciation explain the investment behavior of nonfinancial firms in both countries. At the same time, structural change and financial liberalization do not have a significant impact on interest rates, an important user cost of capital.Originality/value This is the first study examines the corporate investment using dynamic user costs of capital approach for an emerging market. The user cost of capital-based investment models is clearly understudied models for emerging markets. This study is particularly important for emerging markets as investment models need to have a theoretical background. ObjetivoEn el presente estudio se examina la inversion empresarial utilizando un modelo de coste de capital del usuario para dos importantes economias latinoamericanas: Brasil y Mexico. En este trabajo se emplea un modelo dinamico de coste de capital para el usuario. El modelo ampliado tambien tiene en cuenta el modelo de inversion con el coste de ajuste convexo. Ademas, se investiga la relacion entre el cambio estructural, la liberalizacion financiera y la inversion. El presente estudio, por tanto, arroja nueva luz sobre el comportamiento de la inversion en los mercados emergentes latinoamericanos.Diseno/metodo/enfoqueSe emplea el metodo GMM diferenciado para controlar la endogeneidad, la heteroscedasticidad y la autocorrelacion en la modelizacion de la inversion empresarial a lo largo de 20 anos en ambos paises.ResultadosLos resultados indican que el modelo dinamico de inversion basado en el coste de capital para el usuario explica la inversion empresarial en Brasil y Mexico. Especialmente, el tipo de interes y la depreciacion explican el comportamiento de la inversion de las empresas no financieras en ambos paises. Al mismo tiempo, se constata que el cambio estructural y la liberalizacion financiera no tienen un efecto significativo sobre los tipos de interes, que es un importante coste de uso del capital.OriginalidadEste es el primer estudio que examina la inversion empresarial utilizando un enfoque dinamico basado en los costes de capital para un mercado emergente. Los modelos de inversion basados en los costes de uso del capital son claramente modelos poco estudiados para los mercados emergentes. Este estudio es especialmente importante para los mercados emergentes, ya que los modelos de inversion deben tener un trasfondo teorico.
dc.identifier.doi10.1108/ARLA-04-2023-0065
dc.identifier.endpage585
dc.identifier.issn1012-8255
dc.identifier.issn2056-5127
dc.identifier.issue4
dc.identifier.scopus2-s2.0-85174181779
dc.identifier.scopusqualityQ2
dc.identifier.startpage567
dc.identifier.urihttps://doi.org/10.1108/ARLA-04-2023-0065
dc.identifier.urihttps://hdl.handle.net/20.500.14669/2143
dc.identifier.volume36
dc.identifier.wosWOS:001083978300001
dc.identifier.wosqualityQ3
dc.indekslendigikaynakWeb of Science
dc.indekslendigikaynakScopus
dc.language.isoen
dc.publisherEmerald Group Publishing Ltd
dc.relation.ispartofAcademia-Revista Latinoamericana De Administracion
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.snmzKA_20241211
dc.subjectCorporate investment
dc.subjectGMM
dc.subjectBrazil
dc.subjectMexico
dc.subjectUser cost of capital
dc.subjectInvestment theory
dc.subjectInversion empresarial
dc.subjectBrasil
dc.subjectCoste de capital para el usuario
dc.subjectTeoria de la inversion
dc.subjectD25
dc.subjectE22
dc.subjectG11
dc.subjectG30
dc.titleThe user cost of capital and corporate investment in the Latin American economies: a novel approach
dc.typeArticle

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