2018 International Financial Issues Winter Symposium


Report of the 2018 International Financial Issues Winter Symposium



The School of Business held the International Financial Issues Symposium on January 12 of 2018 in the Graduate School of Business of the University of Puerto Rico on the Rio Piedras Campus in the Plaza Universitaria Building in Room 6035 in the North Tower.  Attendees had ample access to parking and refreshments.

Dean Jose Taboada of the School of Business of the University of Puerto Rico made opening comments that were followed by those of Co-chair Dr. Arleen Hernandez. Co-chair Dr. Scott Brown took over for the duration as master of ceremony.

Morning Discussions

The first speaker was Jimmy Torrez on “Do Differences in Capital Gains and Dividends Tax Rates Bias Real Investments Decisions.” Dr. Torrez is a professor of finance with the Graduate School of Business of the University of Puerto Rico (EGAE-UPR).  The next speaker was Dr. Ashwin Modi of the Medical Sciences Campus of the UPR.  He discussed “Internet Banking in Fastest Growing Economy: An Extension of Technology Acceptance Model (TAM).” Dr. Rosarito Sánchez-Morcilio discussed “Assertive Estimation of Cost in a Software Development Project” on behalf of the programming department of the EGAE-UPR.

Afternoon Discussions

Professor of Finance Dr. Scott Brown discussed “Amihud Illiquidity, Open Interest, and Expected Stock Returns” on behalf of the EGAE-UPR.  Dr. Mario Brandtner represented the Friedrich Schiller University of Jena in Germany in presenting his research on “Expected Shortfall, Spectral Risk Measures, and the Aggravating Effect of Background Risk, or: Risk Vulnerability and the Problem of Subadditivity.”  Dr. Minna Martikainen of the Hanken School of Economics presented her work on “Corporate Insider Trading and Social Networks.”  Dr. Panayiotis Theodossiou of the Cyprus University of Technology covered his work on “The Risk and Return Conundrum Explained: International Evidence.”  The final presentation was by Dr. Lenos Trigeorgis also of the University of Cyprus discussing “Seemingly Unrelated Stock Market Anomalies: Profitability, Distress, Lotteryness and Volatility.”

Keynote – The Greek and Cyprus Financial Crisis

In light of the current fiscal crisis in Puerto Rico all were eager to hear a keynote discussion by Panayiotis Theodossiou of the Cyprus University of Technology on the differences between the Greek and Cypriote recovery.  Dr. Theodossiou explained how the economy of Cyprus was hurt by the imposition of excessive welfare by the European Union (EU). Germany and France further damaged recovery by protecting their national interest. But despite this a major component of the Cyprus recovery was a dramatic reduction in local business taxes in Cyprus. This helped the island attract better firms that employed many thus buoying the local economy.  Panayiotis concluded in explaining that the main difference between Greece and Cyprus is simple.  Cypriotes have a stronger work ethic than Athenians.  Most importantly Cypriotes work together far better than the Greeks of mainland Europe.

Panel Discussion – The Puerto Rico Financial Crisis

The symposium closed with a dynamic panel discussion of “The Puerto Rico Financial Crisis.” Dr. Theodossiou steered the panel composed of representatives of the two largest local political parties and three industry representatives.  Professor Carlos Colon de Armas first gave some data slides showing that the Puerto Rico economy began todown-slide when a form of Federal welfare known as food stamps were imposed on Puerto Rico in 1972. This evidence suggests that excessive welfare by the EU has damaged the GDP and GNP of Cyprus and done the same for Puerto Rico from the U.S. Federal government.

Professor Colon de Armas further asserted that Section 936 of the local tax code did nothing to raise revenes for Puerto Rico.  Dario Benrubi CPA and CFO of AstraZeneca strongly objected explaining that the pharmaceutical industry pays a third of corporate tax receipts on the island despite the closing of Section 936 by President Clinton as requested by then governor Pedro Rossello.  CEO of MyLogicIQ  Ganesh Rajappan stated under no uncertain terms that he would not have relocated his service export company to Puerto Rico from California without Act 20 and Act 22 tax benefits. President and COO of American International Bank Brian Smoyer chimed in with similar comments that his international banking operation would not be viable without the tax benefits of Act 20 and 22.  Former Secretary of State of Puerto Rico and Resident Commissioner to Congress Antonio Colorado made an important statement asserting that the time for squabbling is over and that both parties must work together.

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By: M. Rios Bracero