Corporate Governance Index, Firm Valuation and Performance in Brazil

André Luiz Carvalhal da Silva () and Ricardo Pereira Câmara Leal ()
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André Luiz Carvalhal da Silva: Instituto Coppead de Administração da Universidade Federal do Rio de Janeiro (UFRJ)

Brazilian Review of Finance, 2005, vol. 3, issue 1, 1-18

Abstract: This study investigates the relationship between the quality of a firms corporate governance practices and its valuation and performance, through the construction of a broad firm-specific corporate governance index for Brazilian listed 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. Panel data results indicate that less than 4% of Brazilian firms have good corporate governance practices, and that firms with better corporate governance have significantly higher performance (return on assets). There is also positive relationship between Tobin’s Q and better corporate governance practices although the results are not statistically significant.

Keywords: corporate governance index; firm valuation and performance; Brazil (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:brf:journl:v:3:y:2005:i:1:p:1-18

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