Corporate Governance and Ownership Structure in Brazil: Causes and Consequences

Abstract

The literature indicates that, mainly in countries with high stock concentration, the ownership structure is an important internal mechanism of control of the corporate governance, with effects in the companies' value and performance. In Brazil, the existing relationship among corporate governance - ownership structure - performance is still not conclusive. The present study investigates if there is any relationship among ownership structure, financial performance and value in the Brazilian non-financial public companies with stocks negotiated in the São Paulo Stock Exchange, between the period of 1997 to 2001, as well as the determinant of the level of concentration of the ownership in these companies. In the empiric investigation it was used a multiple regression analysis through the estimators of the Ordinary Least Squares with heteroscedasticity in accordance with White (1980). Concerning the used methodology, the results indicate that the variables of ownership structure as defined do not have influence on the financial performance and value of the companies. Remaining to the determinant of the ownership structure of the Brazilian non-financial public companies, the results indicate that the ownership structure can be explained by the size of the firm, market instability and regulation, being the latter the main determinant of the ownership structure.

Keywords: Ownership Structure, Corporate Governance, Agency Theory