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Opening or not capital in Brazil: an practice analysis of perception of financial executives

Author

Listed:
  • Helen Cristina Steffen

    (University of Vale do Rio dos Sinos)

  • Francisco Antônio Mesquita Zanini

Abstract

This study investigated the aspects and reasons why Brazilian firms go public, from the viewpoint of chief financial officers (CFOs). From the BM&F Bovespa and the magazine Valor Investe, we selected 113 Brazilian firms that had successfully completed an Initial Public Offerings (IPO) between January 2004 and December 2010, and firms those that are large enough to go public, but have not attempted an IPO. Following Brau and Fawcett (2006), we surveyed the CFOs about their perceptions at the time of the IPO. The most findings were: (1) the main motivation for going public was to reduce the cost of capital; (2) general market conditions were crucial to the timing of the IPO; (3) underwriters were selected based on overall reputation, quality of the research department, and industry expertise; (4) the use of a Big-4 accounting firm was seen as a positive sign by the respondents; (5) the overallotment option of shares to stabilize prices was considered the most important IPO process issue; and (6) the main reason for remaining private was to preserve decision-making control and ownership.

Suggested Citation

  • Helen Cristina Steffen & Francisco Antônio Mesquita Zanini, 2014. "Opening or not capital in Brazil: an practice analysis of perception of financial executives," Brazilian Review of Finance, Brazilian Society of Finance, vol. 12(4), pages 597-642.
    • Handle: RePEc:brf:journl:v:12:y:2014:i:4:p:597-642
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    Cited by:

    1. Maghyereh, Aktham I. & Awartani, Basel, 2018. "The factors influencing the decision to list on Abu Dhabi securities exchange," Journal of Behavioral and Experimental Finance, Elsevier, vol. 19(C), pages 89-103.

    More about this item

    Keywords

    Perceptions; Initial Public Offerings (IPO); chief financial officers (CFO); motivations; concerns;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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