Effects of Beta Convergence in the Stock Markets of the Pacific Alliance through Annual Financial Statements

Marc Cortes Rufe; Jordi Marti Pidelaserra

doi:10.4067/S0718-88702025000100033

Authors

Marc Cortes Rufe Department of Business, University of Barcelona
Jordi Marti Pidelaserra Department of Business, University of Barcelona

DOI:

https://doi.org/10.4067/S0718-88702025000100033

Keywords:

Beta Convergence, Risk and Return Disparities, Market Integration, Pacific Alliance

Abstract

This investigation delves into the ramifications of beta convergence on the stock markets of the Pacific Alliance countries, scrutinizing data extracted from their annual financial statements. Beta convergence, denoting the gradual mitigation of risk and return disparities in international financial markets, is inexorably entwined with the process of market integration. Employing sophisticated econometric methodologies, the study discerns nuanced convergence or divergence patterns within crucial financial ratios, including the Quick Ratio, Return on Equity (ROE), Return on Assets (ROA), Working Capital, Cash Conversion Cycle, and Debt-to-Equity Ratio, thereby furnishing invaluable insights into corporate performance. The findings therefore contribute decisively to well-informed decision-making processes for discerning investors, analysts, and executives maneuvering within the dynamic and intricately interlinked global financial milieu.

Downloads

Download data is not yet available.

Author Biography

Marc Cortes Rufe, Department of Business, University of Barcelona

Associate Professor of Applied Economics and Econometrics , University of Barcelona (Universitat de Barcelona)

References

Akram, V., Singh, S., & Kumar Sahoo, P. (2023). A club convergence analysis of financial integration: Cross-country evidence. Studies in Economics and Finance, 40(4), 647–660. https://doi.org/10.1108/sef-11-2022-0543

Allegret, A., Allegret, J.-P., & Ibrahim, D. (2023). Financial asymmetries between Euro area and the United States: An international political economy perspective. Journal of Policy Modeling, 45(2), 266–285. https://doi.org/10.1016/j.jpolmod.2023.03.003

Banco Central de Reserva del Perú. (2022). Informe anual 2022 [Annual report 2022].

Banco de la República. (2022). Reporte de política monetaria 2022 [Monetary policy report 2022].

Banco de México. (2022). Informe anual 2022 [Annual report 2022].

Barro, R. J., & Sala-i-Martin, X. (1991). Convergence across states and regions. Brookings Papers on Economic Activity, 1991(1), 107–182. https://doi.org/10.2307/2534639

Belli, M. M., Marciano Marques, F. A., Picoli, L., & De Oliveira Santos, P. H. (2023). The relationship between ESG and financial performance: A review of research in Latin America and worldwide. Latin American Journal of Management for Sustainable Development, 6(1), 84–107. https://doi.org/10.1504/lajmsd.2023.10057548

Blanco, B., Dhole, S., & Gul, F. A. (2022). Financial statement comparability and accounting fraud. Journal of Business Finance & Accounting, 50(7-8), 1–40. https://doi.org/10.1111/jbfa.12652

Bolsa de Valores de Colombia. (2023). Annual report 2023.

Bolsa de Valores de Lima. (2023). Informe anual 2023 [Annual report 2023].

Bolsa Mexicana de Valores. (2023). Annual report 2023.

Botta, M., & Angelo, L. V. (2022). Non-linear capital structure dynamics. Journal of Business Finance and Accounting, 49(9-10), 1897–1928. https://doi.org/10.1111/jbfa.12596

Burchardt, H.-J. (2023). Wealth, inequality, and democracy in Latin America. Routledge. https://doi.org/10.4324/9781003385721-8

Castañeda, J. E., & Cendejas, J. (2022). Macroeconomic asymmetry in the Eurozone before and after the Global Financial Crisis: An appraisal of the role of the ECB. Journal of Policy Modeling, 44(1), 184–202. https://doi.org/10.1016/j.jpolmod.2021.11.002

Central Bank of Chile. (2022). Informe anual 2022 [Annual report 2022].

Fanti, L., Pereira, M. C., & Virgillito, M. E. (2023). The North-South divide: Sources of divergence, policies for convergence. Journal of Policy Modeling, 45(2), 405–409.

Garg, S., & Sushil. (2022). Impact of de-globalization on development: Comparative analysis of an emerging market (India) and a developed country (USA). Journal of Policy Modeling, 44(6), 1179–1197. https://doi.org/10.1016/j.jpolmod.2022.10.004

Gomez Villegas, M., & Larrinaga, C. (2023). A critical accounting project for Latin America? Objects of knowledge or ways of knowing. Critical Perspectives on Accounting, 93, 1–40. https://doi.org/10.1016/j.cpa.2022.102508

Hong, E., Park, M. C., & King, T.-H. D. (2022). The effect of option listing on financing decisions. Journal of Business Finance and Accounting, 50(3-4), 858–891. https://doi.org/10.1111/jbfa.12641

International Monetary Fund. (2023). World economic outlook 2023.

Organisation for Economic Co-operation and Development. (2023). Economic outlook for Latin America 2023.

Pagaduan, J. A. (2023). Spatial income inequality, convergence, and regional development in a lower middle-income country: Satellite evidence from the Philippines. The Developing Economies, 61(2), 117–154. https://doi.org/10.1111/deve.12354

Pilouras, G., & Yu, F.-Y. (2023). Multi-agent performative prediction: From global stability and optimality to chaos. In 24th ACM Conference on Economics and Computation (pp. 1047–1074). Association for Computing Machinery.

Ramiah, V., Zhao, Y., Moosa, I., & Graham, M. (2014). A behavioural finance approach to working capital management. The European Journal of Finance, 22(8-9), 662–687. https://doi.org/10.1080/1351847x.2014.883549

Sala-i-Martin, X. (1996). The classical approach to convergence analysis. The Economic Journal, 106(437), 1019–1036. https://doi.org/10.2307/2235375

Santiago Stock Exchange. (2023). Annual report 2023.

Thonse Hawaldar, I., Kumar Meher, B., Kumari, P., & Kumar, S. (2022). Modelling the effects of capital adequacy, credit losses, and efficiency ratio on return on assets and return on equity of banks during COVID-19 pandemic. Banks and Bank Systems, 17(1), 115–124. https://doi.org/10.21511/bbs.17(1).2022.10

Wang, B. (2019). The cash conversion cycle spread. Journal of Financial Economics, 133(2), 472–497. https://doi.org/10.1016/j.jfineco.2019.02.008

Wasi, A. M., Pham, P. T., & Zurbruegg, R. (2022). Bank systemic risk: An analysis of the sovereign rating ceiling policy and rating downgrades. Journal of Business Finance & Accounting, 50(1-2), 411–440. https://doi.org/10.1111/jbfa.12637

World Bank. (2023). Global economic prospects 2023.