IDEAS home Printed from https://ideas.repec.org/a/brf/journl/v13y2015i3p438-469.html
   My bibliography  Save this article

Ownership Concentration and Governance Quality of Brazilian Firm

Author

Listed:
  • Isac de Freitas Brandão

    (Universidade Federal do Ceará)

  • Vicente Lima Crisóstomo

Abstract

The relationship between ownership concentration and corporate governance quality is analyzed in Brazil. Models are estimated by the system generalized method of moments (GMM) for a balanced panel of 85 companies in the period 2010-2013. The results indicate that the concentration of ownership has an adverse effect on the quality of corporate governance, as measured by an index based on 28 voluntary good governance practices. The negative linear relationship indicates that large shareholders are unfavorable to adoption of best corporate governance practices. Additionally, the negative quadratic relationship reinforces this result to high levels of concentration highlighting the possibility of expropriation of minority shareholders. Less ownership concentration favors the quality of corporate governance suggesting that the need for coalition to control decreases the power of the main shareholder, possibly helping to alleviate the conflict between controlling and minority shareholders under the principal-principal agency model theoretical framework.

Suggested Citation

  • Isac de Freitas Brandão & Vicente Lima Crisóstomo, 2015. "Ownership Concentration and Governance Quality of Brazilian Firm," Brazilian Review of Finance, Brazilian Society of Finance, vol. 13(3), pages 438-469.
    • Handle: RePEc:brf:journl:v:13:y:2015:i:3:p:438-469
    as

    Download full text from publisher

    File URL: http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/download/45739/56150
    Download Restriction: no
    File URL: http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/45739
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Corporate governance quality; ownership concentration; agency conflicts; Brazil.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:brf:journl:v:13:y:2015:i:3:p:438-469. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marcio Laurini (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.