Does Transparency Pay Off in the Long-Run? Evidence from Stock Market Segment Switches in Brazil

42 Pages Posted: 10 Oct 2018 Last revised: 12 Jul 2019

See all articles by Luiz Moura

Luiz Moura

Fundação Getulio Vargas

Lars Norden

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE)

Date Written: July 10, 2019

Abstract

We investigate the long-run effects of different levels of transparency in the stock market. We consider Brazilian firms that switched from the traditional segment to the more transparent Nível 1, Nível 2 or Novo Mercado since 2000. We document that higher levels of transparency result in significantly higher abnormal stock returns in the long-run, controlling for firm and time fixed effects. The positive impact of transparency has increased after the Global Financial Crisis, market microstructure improved, and the market impact is stronger for financially healthy firms. The evidence suggests that higher transparency paid off for Brazilian firms in the long-run.

Keywords: Transparency, Corporate Governance, Listing Segments, Long-Run Performance

JEL Classification: G10, G14, G30

Suggested Citation

Moura, Luiz and Norden, Lars, Does Transparency Pay Off in the Long-Run? Evidence from Stock Market Segment Switches in Brazil (July 10, 2019). Available at SSRN: https://ssrn.com/abstract=3243023 or http://dx.doi.org/10.2139/ssrn.3243023

Luiz Moura

Fundação Getulio Vargas ( email )

Brazil

Lars Norden (Contact Author)

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE) ( email )

Rua Jornalista Orlando Dantas 30
Rio de Janeiro, 22231-010
Brazil
+552130832431 (Phone)

HOME PAGE: http://www.larsnorden.de

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