Ganhos da Globalização do Capital Acionário em Crises Cambiais

Marcio Janot and Walter Novaes

No 183, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: A recent literature shows that cross-listing in the U.S., mainly through ADRs, protects minority shareholders of countries that offer weak legal protection to investors. Yet, this literature does not show evidence of corporate decisions that ADRs are likely to discipline. This paper uses data on the Brazilian currency crisis of 1999 to argue that firms with ADRs manage their currency risk more effectively. Anticipating the crisis, ADR firms reduced the average ratio of their currency mismatches over assets by 6.4 percentage points, relatively to other public firms. Additional results link this stronger adjustment to the pressure of international arbitrageurs.

Date: 2009-04

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