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Dear readers, this fourth edition of 2018 is very special. It marks the debut of our new website. It is a total departure from the previous site, with a cleaner look, new features, and responsive design. This launch could not be possible without the commitment and effort of our editorial assistant, Patricia, who has been conducting the migration process relentlessly with the support of Kallirroi Stavrianou. I would also like to thank David Green from, who setup the website in no time, and Diogo Sander from FUCAPE’s marketing team, who helped defining the look & feel of the site. Last, but not least, I would like to thank the financial support from CNPq and FUCAPE Business School, which made the migration possible.

During the next weeks, both the old and new site will coexist. As the migration proceeds, we will update the DOIs to point to the new site. Once it is completed, the old site will be shut down. We would like to ask you to notify us of any problems relating to the new website or the DOIs. Although Patricia and Kalli are very careful, the migration is a complex process and the website is brand new, and a few things might have gone unnoticed by us.

Without further ado, we have two articles in our Special Section on corruption. This is a theme which unfortunately has been on the spotlight in Brazil for some time. We hope to bring a better understanding of the phenomenon and ultimately help in designing mechanisms to deter it.

The first paper studies how political connections are linked to cost of capital and performance of listed companies in Brazil. Although there are instances of crony capitalism all over the world, it is an especially delicate area in Brazil. Da Silva, Xavier, Gambirage & Camilo measure political connection through campaign donations. Findings are quite intriguing, and point that these politically connected firms do not exhibit lower cost of capital nor better performance. [link]

The second paper attempts to detect manipulation of financial reporting on expenditures using Benford’s Law. Cella and Zanolla compare two cities, one with a low and another with a high level of transparency. Results indicate that the city with lower transparency exhibits lower adherence to Benford’s Law than its more transparent counterpart. This indicates that Benford’s Law could be used to analyze automatically allfinancial reporting, not only a sample, from all state entities, being a first filter indicating possible problems in reporting and potential corruption schemes. [link]

The next paper begins the standard articles section, and studies whether the country of origin of luxury items has any influence on the decision of consumption of Brazilians. Montanari, Rodrigues, Giraldi & Neves survey 329 students, using three brands from three different countries, and find that country is a criterion of minor importance. These results point that marketing managers should emphasize other aspects than county of origin as an optimal strategy. [link]

Our fourth paper focuses on how auditors perceive fair value measurement of financial instruments. Mendes, Niyama and Silva interview 62 independent auditors. Their results suggest that to improve the audit process, the auditors should have a more robust academic background, and the team should include a specialist in finance. [link]

The fifth paper touches a theme that granted Richard Thaler the 2017 Nobel Prize in Economics. Malaquias and Pontes argue that the lock-up period mitigates behavioral biases. By limiting the investors’ course of action, it helps protecting them from their whims, and therefore afford them a better return even after controlling for risk. [link]

The article that closes our edition measures interdependence between markets. Correa, Pimenta Jr and Gaio test the interdependence between ADRs from developing LatAm markets (Brazil, Argentina, Chile and Mexico) and shares from developed markets (USA, Japan, UK and France). Results indicate that these ADRs exhibit more interdependence with developed markets than their developing counterparts. [link]

Good reading to everyone!

Fabio Motoki – Editor-in-Chief -

How to Cite
Motoki, F. (2018). Editorial. Brazilian Business Review, 15(4). Retrieved from
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