Opening or not capital in Brazil: an practice analysis of perception of financial executives

Helen Cristina Steffen (hcsteffen@unisinos.br) and Francisco Antônio Mesquita Zanini (fzanini@unisinos.br)
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Helen Cristina Steffen: University of Vale do Rio dos Sinos

Brazilian Review of Finance, 2014, vol. 12, issue 4, 597-642

Abstract: This study investigated the aspects and reasons why Brazilian firms go public, from the viewpoint of chief financial officers (CFOs). From the BM&F Bovespa and the magazine Valor Investe, we selected 113 Brazilian firms that had successfully completed an Initial Public Offerings (IPO) between January 2004 and December 2010, and firms those that are large enough to go public, but have not attempted an IPO. Following Brau and Fawcett (2006), we surveyed the CFOs about their perceptions at the time of the IPO. The most findings were: (1) the main motivation for going public was to reduce the cost of capital; (2) general market conditions were crucial to the timing of the IPO; (3) underwriters were selected based on overall reputation, quality of the research department, and industry expertise; (4) the use of a Big-4 accounting firm was seen as a positive sign by the respondents; (5) the overallotment option of shares to stabilize prices was considered the most important IPO process issue; and (6) the main reason for remaining private was to preserve decision-making control and ownership.

Keywords: Perceptions; Initial Public Offerings (IPO); chief financial officers (CFO); motivations; concerns (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:brf:journl:v:12:y:2014:i:4:p:597-642

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