Pyramidal Ownership Structures in Companies and Corporate Governance in Brazil: the role of Novo Mercado
AbstractThe 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 InfoPaper provided by University of São Paulo (FEA-USP) in its series Working Papers, Department of Economics with number 2012_10.
Date of creation: 31 Jul 2012
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Find related papers by JEL classification:
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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