A Deep Dive into Brazil’s Fortune 500 Companies
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In India, minority shareholder rights are like giving mad support to equity markets, you know?41 The vibe in India is completely different from Brazil, fam. Minority shareholders in Brazil are not well protected, the stock market is not particularly active (Park 2012), and companies use subordinated shares to avoid fair corporate governance (Lazzarini and Musacchio 2011; DiMiceli 2010a; DiMiceli 2010d).42 OMG, it's so wild that India has flexed its equity capital market institutions, despite the fact that Brazil's per capita GDP is about 7-8 times higher than India's. My mind is blown, fam!43 The need to examine local institutional vibes and differences in flex stage is extremely important in a cross-regional comparative analysis, don't you think?
It's obvious that Brazil's per capita GDP is about 7-8 times higher than India's.
So, it's safe to assume that there will be significant differences in development and priorities, you know? Before flexing a new VoC, consider the mad institutional and empirical challenges that arise when comparing capitalism systems across countries with per capita differences of up to 35 times (such as India and the United States). A more woke understanding of the interplay between development, developmental states, and VoC is required - a topic that will be covered in greater depth in the following chapter, fam. Nolke's claim that the current structures of Indian and Brazilian capital markets are nearly identical is a clear example of the need to fully comprehend relative differences in stages of development. OMG, the corporate governance vibes in India and Brazil are so different, you know? While both countries face rampant corruption and family-dominated corps, their institutional norms are vastly different. OMG, as in Nolke's analysis (2012), I completely highlight a fundamental empirical issue. To be honest, it's just a mood. According to Nolke, the lack of cash flow and the emphasis on family in Indian businesses are reasons to combine Indian and Brazilian corporate governance standards. Nolke is talking about how Indian capital markets aren't liquid, but ownership concentration isn't the only factor influencing market liquidity, you know? Nolke's empirical evidence of illiquid Indian markets comes from a paper published by Allen et al in 2006.
However, in the same paper and a subsequent paper (Allen et al 2007), Allen identifies Indian equity markets as hella liquid.
According to Allen et al., the Bombay Stock Exchange (BSE) and National Stock Exchanges (NSE) are the world's most lit stock exchanges. "Bruh, the dollar value of trading on the Indian Stock Exchange may not be as high as in Europe or the United States, but consider this: the number of equity trades on BSE/NSE is roughly ten times greater than on Euronext or London. It's comparable to NASDAQ or the New York Stock Exchange, fam.39." Like, the number of derivatives trades on the NSE is wayyy higher than Euronext / London, and it's on par with U.S. derivatives exchanges, you know? The number of trades is a major indicator of how interested investors are in stocks and trading. It's all about the investor interest and participation, you understand? And do you believe that good corporate governance practices are extremely important in India? (2007). Nolke and Vliegenthart's Dependent Market Economies (2009) is one example of a cross-regional approach in literature. Dependent Market Economies are designed to flex on middle-income countries that know how to hustle with cheap labor and mad manufacturing skills.37 Nolke totally gets the idea that middle-income countries need some new paradigms, you know? So he starts talking about this VoC in India and Brazil that is all about the state's role, which is extremely important (2012). For example, if you believe that middle-income countries deserve their own brand of capitalism, you must address developmental economics.
Otherwise, it's a weak claim that isn't supported by the facts.
Nolke begins his argument by comparing the "same" situation of India and Brazil, claiming that both countries "work on a labor-intensive medium level of tech, based on cheap labor" (2012), but this claim, like, does not hold up when viewed objectively. Nolke reveals how mining in Brazil and services in India are major flexes when it comes to labor insensitivity, giving them a huge advantage (2012). These claims, such as the lack of a cap, demonstrate a misunderstanding of how India and Brazil's economies grow and develop. OMG, even though Brazil exports raw materials, the extractive industries are extremely capital intensive and do not provide a significant number of "low-cost manufacturing jobs" in Brazil, you know? In 2008, mining accounted for only 0.4% of jobs (ILO 2010). To be honest, it's not very lit. In India, for example, IT services aren't even on the same level as natural resource extraction, you know? And this guy completely ignores the fact that India's low-tech manufacturing industries employ far more people than the services sector. Even within services, IT is not the primary source of employment (Ministry of Labour 2013). Textiles and leather are India's fastest growing manufacturing export sectors, not even "medium tech" (Papola & Sahu 2012). Nolke's comparison of "middle-income" countries completely misses the point that India is significantly lower on the income scale than Brazil. So figuring out how they're developing is a completely different ballgame, you know?
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