Journal of Economics Finance and International Business

Economic Factors and their Impact on Regional and Sectoral Development

Benoit Mougenot — Mon, 14 Apr 2025 00:00:00 +0000

Benefits of Forfaiting

Manuel Pumasunco Rivera — Mon, 14 Apr 2025 00:00:00 +0000

This article exposes the benefits of Forfaiting, as a financing instrument for international trade, its definition, operating mechanisms, advantages and disadvantages, as well as its regulations in the International Chamber of Commerce.

Forfaiting is a very little-known financing tool and at the same time very beneficial for all exporters and importers who use a Letter of Credit as a means of international payment.

The benefit for exporters is improved liquidity, reduced risk of non-payment, improved negotiation capacity; For importers, a longer payment period is obtained, their cash flow (liquidity) improves and the cost of financing is reduced.

A status is also presented of how the financial tool of Forfaiting is growing. A study of articles related to Forfaiting is carried out, as well as a procedure on how to access financing.

A brief and concise description of the financing process, requirements and operation in banking entities is also presented.

Shock in the price of copper on poverty in Peru: An analysis at the provincial level

José Carlos Muñoz Aguilar — Mon, 14 Apr 2025 00:00:00 +0000

In the context of high copper prices in recent years, which quadrupled its value since the beginning of the 2000s, this
research proposes to analyze the effects of variations in the copper price, which is the main mineral exported by Peru, on the
poverty ratio. For this reason, a DIF & DIF model is proposed. The results indicate that for every rise of 1% in the copper
price, from the super cycle of commodities price, in the longterm, declines of 0.061 percentage points in poverty rates were
generated in provinces where copper is extracted in contrast to provinces where copper is not extracted. In conclusion, copper
is a very important commodity for the development of Peru.

The New Galapagos: Tourism and Development for Northern Peru

Jorge Torres-Zorrilla — Mon, 14 Apr 2025 00:00:00 +0000

In the Piura-Lambayeque Region, in Northern Peru, there are two groups of islands near the Pacific Coast. One is Lobosde-
Tierra and the other one is Lobos-de-Afuera, because it is located further away into the ocean. This paper proposes
construing an artificial floating island between the two groups of islands mentioned above. This would create a larger cluster
of islands that will serve only as a sanctuary for the sea lions and other marine species that live in the area, such as penguins
and other births. This cluster of islands could become the Peruvian Galapagos.

The costs of the investment project are calculated by using the data from similar endeavors in China or Denmark or The
Maldives. We may assume that the unit costs for the Artificial Floating Island in Peru are equal to the unit costs of another
similar project of artificial floating islands in those countries. The benefits of this investment project will be the new income
generated by the new cruise tourism. We may assume that the benefits of the project may be estimated from the actual tourism
revenue from the Galapagos Islands.

The paper advances that the benefit-cost ratio will be positive and the internal rate of return will be higher than other tourism
projects already approved by development banks, such as the Inter-American Development Bank.

The new project will also help relief from the situation Peru is facing with the global COVID-19 pandemic. Economic recession is plaguing Peru in the 2020s and amounts as one of the worst economic situations of the last 100 years. Also, the global economy is in contraction in Europe and other regions. In fact, the aftermath of the pandemic will be considered as years of economic development lost for some countries like Peru. Specifically, receptive tourism in Peru is in danger of extinction after the pandemic. Actually, Peruvian tourism, which gives employment to 1.4 million people who are mainly women, is in collapse.

Also, this article aims to make proposals to help tourism sales recover their position as the most important section of service
exports in Peru. The proposal is intended to encourage a nontraditional tourism on the tropical coast of Northern Peru
that should complement the traditional archeological tourism. The conclusions make emphasis on the fact that, at present,
Peru is not exploiting its comparative advantage in tourism, which could become a leading sector of the economy. Finally,
our thesis is based on the notion that, from 2021 onwards, the recovery of the Peruvian economy must necessarily be based
on exploiting the recovery of external demand rather than putting our trust in domestic demand growth.

Risk indicators and expected returns on foreign direct investment in the mining sector of Peru and Chile (2006-2023)

Mon, 14 Apr 2025 00:00:00 +0000

The aim of this study is to analyze the impact of the expected return on capital and risk indicators on investors’ decision-making in the mining sector of Peru and Chile during the 2006-2023 period. The research focuses on three exogenous variables: the cost of capital calculated using the CAPM model, the corruption perception index, and the governance index. The endogenous variable is Foreign Direct Investment, with all variables expressed in annual periods. Additionally, the methodology employed corresponds to the Autoregressive Distributed Lag (ARDL) model. As main results, it is shown that the political risks captured in the Corruption
Perception Index (CPI) and the governance index (WGI) are not significant for the flows of foreign direct investments for Peru, however, if they are significant, it is said that they do influence Chile’s foreign direct investment flows. On the other hand, the expected performance of the mining sector presents positive effects on the investment flows for the study countries, that is, there is a direct relationship, with an increase in the expected performance of the sector, foreign investment from the countries of study
will increase.