Abstract

http://ssrn.com/abstract=2181039
 
 

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The Evolution of Corporate Governance in Brazil


Bernard S. Black


Northwestern University - School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)

Antonio Gledson De Carvalho


Fundacao Getulio Vargas School of Business at Sao Paulo

Joelson Oliveira Sampaio


University of Sao Paulo (USP) - Department of Economics; São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP

April 3, 2014

Northwestern Law & Econ Research Paper No. 12-22

Abstract:     
We use extensive hand collected surveys reporting governance practices in 2004, 2006, and 2009 to build a broad corporate governance index and analyze the evolution of corporate governance in Brazil and the association between governance and firm value. We find that corporate governance practices improved significantly over this period. This evolution is due to two main factors: 1) growth in Novo Mercado and Level II (NM&L2) listings, mainly through IPOs by new firms, and 2) improved practices at non-NM&L2 firms, principally adopting governance elements required for NM&L2 listing. Governance practices for firms already listed on NM&L2 were stable. Adoption of the elements of our governance index that are required for NM&L2 listing predicts higher firm value. In contrast, adoption of the remaining elements of our index does not predict firm value. Thus, governance changes appear to respond to investor preferences.

Number of Pages in PDF File: 30

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Date posted: November 30, 2012 ; Last revised: April 3, 2014

Suggested Citation

Black, Bernard S. and De Carvalho, Antonio Gledson and Sampaio, Joelson Oliveira, The Evolution of Corporate Governance in Brazil (April 3, 2014). Northwestern Law & Econ Research Paper No. 12-22. Available at SSRN: http://ssrn.com/abstract=2181039

Contact Information

Bernard S. Black (Contact Author)
Northwestern University - School of Law ( email )
375 E. Chicago Ave
Unit 1505
Chicago, IL 60611
United States
512-503-2784 (Phone)

Northwestern University - Kellogg School of Management
2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)
European Corporate Governance Institute (ECGI)
Brussels
Belgium
Antonio Gledson De Carvalho
Fundacao Getulio Vargas School of Business at Sao Paulo ( email )
R. Itapeva, 474 - 7o. andar
Sao Paulo 01313-902
Brazil
+5511 3281-7767 (Phone)
Joelson Oliveira Sampaio
University of Sao Paulo (USP) - Department of Economics ( email )
Av. Prof. Luciano Gualberto 908
Sao Paulo SP, 05508-900
Brazil
São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP ( email )
R. Rocha, 233, Bela Vista
São Paulo, 01330-000
Brazil
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