Aldo Musacchio
There are 6 articles for this faculty member.
Endowments, Fiscal Federalism, and the Cost of Capital for States: Evidence from Brazil, 1891-1930
| Authors: | André C. Martínez Fritscher and Aldo Musacchio |
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| Published: | November 10, 2009 |
| Paper Release Date: | October 2009 |
| Feature: | Working Papers |
Do endowments matter in determining the cost of capital for a country or state? Endowments, according to Banco de México's André C. Martínez Fritscher and HBS professor Aldo Musacchio, are the conditions that determine what kind of commodities can be produced and exported in a determined geographical region. Studying the determinants of the risk premium of the bonds issued by Brazilian states between 1891 and 1930—a period of extreme decentralization of fiscal revenues and expenditures in Brazil—the researchers find that risk premia are highly correlated with state public revenue per capita. Because these revenues came, to a large extent, from the taxes states levied on commodity exports, the researchers argue that endowments mattered to determine the cost of capital for states.
Published in 2008
Bank Accounting Standards in Mexico: A Layman's Guide to Changes 10 Years after the 1995 Bank Crisis
| Authors: | Gustavo A. Del Angel, Stephen Haber, and Aldo Musacchio |
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| Published: | April 24, 2008 |
| Paper Release Date: | April 2008 |
| Feature: | Working Papers |
Mexico was the first emerging market compelled to reformulate the financial reporting of its banks as a result of a financial crisis. In the last decade, Mexico has undergone a process of internationalization of its banking industry. Today, more than 80 percent of the equity of Mexican banks belongs to internationally active bank corporations. This internationalization demands more transparent regulation, including standardized accounting rules and better disclosure of information. The case of Mexico can therefore serve as an example of the relevance of these changes, as well as of their scope and limitations. This paper attempts to clarify the nature and structure of the new accounting standards, and explains how they have affected financial statements and their interpretation.
Do Legal Origins Have Persistent Effects Over Time? A Look at Law and Finance around the World c. 1900
| Author: | Aldo Musacchio |
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| Published: | February 21, 2008 |
| Paper Release Date: | January 2008 |
| Feature: | Working Papers |
A significant number of recent papers find legal origins to be strongly correlated with current indices of rule of law, financial development, the regulation of entry and labor, and the concentration of ownership, among other things. Few studies, however, have explored whether correlations between institutions and economic and financial outcomes hold in the past. For this reason, we cannot be certain that the alleged persistence of the effects of these institutions passes the scrutiny of history. This paper examines specifically the relationship between legal origins and financial development by analyzing countries' legal traditions and the extent of investor protections and financial development over time.
Laws vs. Contracts: Legal Origins, Shareholder Protections, and Ownership Concentration in Brazil, 1890-1950
| Author: | Aldo Musacchio |
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| Published: | February 14, 2008 |
| Paper Release Date: | January 2008 |
| Feature: | Working Papers |
The early development of large multidivisional corporations in Latin America required much more than capable managers, new technologies, and large markets. Behind such corporations was a market for capital in which entrepreneurs had to attract investors to buy either debt or equity. This paper examines the investor protections included in corporate bylaws that enabled corporations in Brazil to attract investors in large numbers, thus generating a relatively low concentration of ownership and control in large firms before 1910. The case of Brazil is particularly interesting because, in Latin America before World War I, it boasted the second-largest equity market and largest number of traded companies. As HBS professor Aldo Musacchio shows, the considerable variation of investor protections over time at the country level, and even at the company level, urges cautions against notions about the persistency of institutions, especially of legal traditions.
Published in 2006
Corporate Governance and Networks: Bankers in the Corporate Networks of Brazil, Mexico, and the United States circa 1910
| Author: | Aldo Musacchio |
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| Published: | August 17, 2006 |
| Paper Release Date: | July 2006 |
| Feature: | Working Papers |
Brazil today looks like a typical case in which business groups and close relations between companies and banks play an important role to overcome information and monitoring problems. This was not always the case. To study how the development of financial markets can change the interaction between banks and corporations, Musacchio compared the importance of interlocking boards of directors between corporations and banks in Brazil, Mexico, and the United States at the turn of the twentieth century. This paper and previous research support Musacchio's hypothesis that financial markets in Brazil were sustained by an institutional framework that protected investors, enforced credit contracts, and promoted regular financial disclosure of company accounts. The development of bond and stock markets, and the relatively good corporate governance practices in Brazil before 1930, made connections with bankers less necessary.
Bankers, Industrialists, and Their Cliques: Elite Networks in Mexico and Brazil During Early Industrialization
| Authors: | Aldo Musacchio and Ian Read |
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| Published: | July 5, 2006 |
| Paper Release Date: | April 2006 |
| Feature: | Working Papers |
Mexico and Brazil had different institutional structures in the early 20th century. Did entrepreneurs in these two countries organize their business networks differently to deal with the different institutional settings? And, how can we compare the impact of the institutional structure of Mexico and Brazil on the networks of entrepreneurial finance and entrepreneurship in general? In this research, Musacchio and Read look at the networks of interlocking boards of directors of major joint stock companies in two large Latin American societies in 1909.
