The Influence of Ownership and Control Structures on Firms’ Performance: Evidence from Brazil

19 Pages Posted: 26 Dec 2010

See all articles by Dante Aldrighi

Dante Aldrighi

University of São Paulo

Aquiles E. G. Kalatzis

University of Sao Paulo (USP) - Department of Production Engineering

Alessandro Vinícius Marques de Oliveira

NECTAR

Date Written: September 1, 2009

Abstract

This paper evaluates the influence of ownership and control concentration, as well as of some other characteristics of the controlling shareholders, on the performance of publicly traded companies. To address this objective, a panel analysis is carried out, relying on data over the period 1997-2002 compiled from financial and ownership structure reports that firms in Brazil are required to file with the securities market regulator. The main findings are the following: (1) high voting rights and cash-flow rights by the largest ultimate shareholder are, respectively, negatively and positively associated with firms’ returns on assets — result which is in accordance with the “expropriation view”; (2) for the largest firms, returns on assets are correlated with both leverage (negatively) and size (positively); (3) the existence of pyramids and the percentage of non-voting preferred shares in the firm’s capital do not seem to affect performance.

Keywords: Corporate ownership, cash-flow rights, voting rights, controlling shareholder, corporate governance, firm performance

JEL Classification: G32

Suggested Citation

Aldrighi, Dante Mendes and Kalatzis, Aquiles E. G. and Vinícius Marques de Oliveira, Alessandro, The Influence of Ownership and Control Structures on Firms’ Performance: Evidence from Brazil (September 1, 2009). Available at SSRN: https://ssrn.com/abstract=1731365 or http://dx.doi.org/10.2139/ssrn.1731365

Dante Mendes Aldrighi (Contact Author)

University of São Paulo ( email )

Avenida Professor Luciano Gualberto 908
São Paulo, São Paulo 05508-010
Brazil

Aquiles E. G. Kalatzis

University of Sao Paulo (USP) - Department of Production Engineering ( email )

Brazil

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