An Empirical Analysis using Private Investments Cross Analyses Method (PICAM) and Monte Carlo Simulation to Evaluate Economic Sector Performance

摘要

Empirical studies regarding the elements of private investments in developing countries, including Brazil, have demonstrated the negative impact of high inflation rates on investments, with great impacts on the innovation policies. However, the recent Brazilian experience clearly shows that stabilization, in and of itself, is not capable of recovering the investment rates and innovation strategies. Therefore, the objective of this study is to analyse the elements of the long term private investment in Brazil. The used method was an econometric cross section data model and Monte Carlo simulation, called PICAM (Private Investments Cross Analyses Methodology). This method was developed by the authors in order to contribute for a better business economic analysis. The PICAM was tested to evaluate an economic sector performance in Brazil's economy. The chosen sector was the Plastic Products Manufacturing Industry. The results have shown evidences of crowding-in effect of public investments in infrastructure over private investments stimulating growth. All the signs of the analyzed variables were obtained as presented in the therory, with the exception of the real interest rates variable (r), in which it was observed that the coefficient is positive and insignificant in the estimated equation. The results also indicated that the operating costs impacts negatively the investment decision on the studied industry, as well as a future trend of declining margins with a period of market consolidation.