Laws versus Contracts: Shareholder Protections and Ownership Concentration in Brazil, 1890–1950
This article examines some of the institutional conditions that facilitated the development of equity markets in Brazil. A critical factor was the addition to corporate bylaws of protections for investors, which enabled relatively large corporations in Brazil to attract investors in large numbers. By availing themselves of this strategy, the firms generated a relatively low concentration of ownership before 1910. Archival evidence, such as company statutes and shareholder lists, reveals that the addition of voting rights to their bylaws, particularly maximum-vote provisions and graduated voting scales (which stipulated that less-than-proportional votes increase in parallel with shareholdings), allowed many Brazilian corporations to balance the relative voting power of their small and large investors. In companies that made such arrangements, the concentration of ownership and control was sharply lower than in the average company. Judging by the Brazilian companies examined for this article, it also appears that the concentration of control was significantly lower before 1910 than it is today.
Volume (Year): 82 (2008)
Issue (Month): 3 (September)
|Contact details of provider:|| Postal: Soldiers Field, Boston, Massachusetts 02163|
Web page: http://www.hbs.edu/bhr/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:hbs:journl:bhr820302_445-473.pdf. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Felice Whittum)
If references are entirely missing, you can add them using this form.