Corporate Governance: Impacts on the Value of Brazilian Public Corporations

Revista de Administração da USP (RAUSP), Vol. 42, No. 1, pp. 64,73, Jan-Mar 2007

20 Pages Posted: 8 May 2012

See all articles by Valdir Lameira

Valdir Lameira

INESC Coimbra

Walter L. Ness

Pontifical Catholic University of Rio de Janeiro (PUC-Rio)

T. Diana van Aduard de Macedo-Soar

Pontifical Catholic University of Rio de Janeiro (PUC-Rio)

Date Written: December 21, 2005

Abstract

In this article we share the results of our research, which sought to verify whether the improvement in corporate governance practices has already had an impact on the value of corporations, measured by the Tobin’s Q. To achieve this objective, a conceptual model was drawn up containing the variables which affect the value of corporations, in order to provide a framework for this study. The investigation examined a non-probabilistic sample of public corporations, whose shares have liquidity and volatility different from zero. The research adopted the multiple linear regression method, which was applied to a secondary data base, thus enabling us to define the variables tested in our model. The data in question were taken from corporations’ financial statements, obtained from the Economatica data base. We also used dummy variables for American Depositary Receipts (ADR) programs, ADR levels 2 and 3 (ADR23), corporations’ listed in the Bovespa’s Differentiated Levels of Corporate Governance (henceforth referred to as DLCG) and the New Market (NM), in order to represent the different levels of corporate governance achieved. The research obtained highly significant statistical results for dummy variables ADR and NM in relation to Tobin’s Q, suggesting that the improvement in corporate governance practices has already had an impact on the value of public corporations whose shares have significant levels of liquidity and price volatility.

Keywords: corporate governance, Tobin’s Q, ADR programs and new market

JEL Classification: G30, C31

Suggested Citation

Lameira, Valdir and Ness, Walter L. and van Aduard de Macedo-Soar, T. Diana, Corporate Governance: Impacts on the Value of Brazilian Public Corporations (December 21, 2005). Revista de Administração da USP (RAUSP), Vol. 42, No. 1, pp. 64,73, Jan-Mar 2007. Available at SSRN: https://ssrn.com/abstract=2054512

Valdir Lameira (Contact Author)

INESC Coimbra ( email )

Rua Antero de Quental, 199, Coimbra
Coimbra, Coimbra 3000-033
Portugal

Walter L. Ness

Pontifical Catholic University of Rio de Janeiro (PUC-Rio) ( email )

Rua Marquas de Sao Vicente, 225
Rio De Janeiro, RJ 22453-900
Brazil

T. Diana Van Aduard de Macedo-Soar

Pontifical Catholic University of Rio de Janeiro (PUC-Rio) ( email )

Rua Marquas de Sao Vicente, 225
Business Administration Departament - IAG
RJ 22453-900 Rio de Janeiro
Brazil
+55 21 2392993 (Phone)
+55 21 5113032 (Fax)

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