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Pyramidal Ownership Structures in Companies and Corporate Governance in Brazil: the role of Novo Mercado


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  • Dante Mendes Aldrighi


  • Maria Dolores Montoya Diaz, Fernando Antonio Slaibe Postali


The literature on corporate governance has not reached a consensus on the relationship between the quality of governance practices and the existence of pyramidal ownership. Traditionally, such schemes have been associated with expropriative practices, but more recent studies have challenged this view. The aim of this paper is to investigate whether the decision to join Bovespa’s “Novo Mercado” is linked to the existence of pyramidal ownership schemes. For this, models were estimated for non-linear panel fixed effect and random effect with the binary dependent variable. The database was built from the Annual Information (“Informativo Annual” - IAN), from the Standardized Financial Report (“Demonstrações Financeiras Padronizadas” – DFP), from Economatica and from Reference Form (“Formulário de Referência” - FR) of the Securities Commission (CVM), constituting a panel of companies with annual observations from 1997 to 2009. The results show that the listing on the Novo Mercado reduces the likelihood of pyramids.

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Bibliographic Info

Paper provided by University of São Paulo (FEA-USP) in its series Working Papers, Department of Economics with number 2012_10.

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Date of creation: 31 Jul 2012
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Handle: RePEc:spa:wpaper:2012wpecon10

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Keywords: pyramidal ownership structures; corporate governance; Novo Mercado; nonlinear panel; fixed effects; random effects;

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