Corporate Governance, Market Valuation and Dividend Policy in Brazil

Coppead Working Paper Series No. 390

17 Pages Posted: 11 Mar 2004

See all articles by Andre Carvalhal

Andre Carvalhal

The COPPEAD Graduate School of Business

Ricardo P. C. Leal

The COPPEAD Graduate School of Business

Date Written: November 2003

Abstract

This study investigates the effects of the corporate governance structure on market valuation and dividend payout of Brazilian companies. The empirical results indicate a high degree of ownership and control concentration. We can also note a significant difference between the voting and total capital owned by the largest shareholders, mainly through the existence of non-voting shares, pyramidal structures, and shareholding agreements. These mechanisms seem to be used by controlling shareholders to keep the firm's control without having to own 50% of the total capital. The evidence also reveals that there is a relationship between governance structure, market valuation, and dividend policy in Brazil.

Keywords: Corporate governance, ownership structure, Brazil, corporate performance, dividend policy

JEL Classification: G32

Suggested Citation

Carvalhal, Andre and Leal, Ricardo Pereira Câmara, Corporate Governance, Market Valuation and Dividend Policy in Brazil (November 2003). Coppead Working Paper Series No. 390, Available at SSRN: https://ssrn.com/abstract=477302 or http://dx.doi.org/10.2139/ssrn.477302

Andre Carvalhal

The COPPEAD Graduate School of Business ( email )

Rua Pascoal Lemme
355 - Cidade Universitária
Rio de Janeiro, Rio de Janeiro 21941-918
Brazil

Ricardo Pereira Câmara Leal (Contact Author)

The COPPEAD Graduate School of Business ( email )

Rua Pascoal Lemme
355 - Cidade Universitária
Rio de Janeiro, Rio de Janeiro 21941-918
Brazil
39389871 (Phone)

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