Pension Funds: The Importance of Corporate Governance

Clea Beatriz Macagnan, Cristiane Benetti, Luiz Alberto Mangoni and Daniel Francisco Vancin
Additional contact information
Clea Beatriz Macagnan: Federal University of Paraiba - Cidade Universitária - João Pessoa – PB, 58051-900, Brazil
Cristiane Benetti: ICN Business School and CEREFIGE - 86 Rue Sergent Blandan, 54000 Nancy - France
Luiz Alberto Mangoni: Fisul College - Av. Pres. Vargas, 561 - Centro, Garibaldi - RS, 95720-000, Brazil
Daniel Francisco Vancin: Vale do Rio dos Sinos University - Av. Unisinos, 950 - Cristo Rei, São Leopoldo - RS, 93022-750, Brazil

Journal of Information Economics, 2024, vol. 2, issue 2, 24-45

Abstract: This study analyzed whether the level of corporate governance of companies listed on the Brazilian capital market is related to the investment decisions of Brazilian pension funds. We start from the assumption that the corporate governance system mitigates the moral risk, that may arise in the relationship between corporate managers and investors and respective shareholders, Brazilian pension funds. Shareholding dispersion would enable opportunism for corporate managers, making decisions focused on their interests to the detriment of shareholders or investors. The governance system would signal that this behavior would be controlled, signaling safer behavior for investors. Thus, the hypothesis is that the level of corporate governance would attract pension funds that would understand this system as reducing investment risk. To test this, we used panel data, with a sample of 1,582 observations of companies listed on the Brazilian Stock Exchange (B3) from 2010 to 2017. The statistical results show that corporate governance positively correlates with investment in pension funds. This leads to the conclusion that, for Brazilian pension funds, companies' signaling about their corporate governance practices is a risk-mitigating factor. Furthermore, these results allow us to infer that the company's governance level associated with leverage is a differentiating signaling element as the evidence points to a positive relationship.

Keywords: pension funds; corporate governance; emerging markets; debt (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.anserpress.org/journal/jie/2/2/28/pdf (application/pdf)
https://www.anserpress.org/journal/jie/2/2/28 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bba:j00008:v:2:y:2024:i:2:p:24-45:d:355

Access Statistics for this article

Journal of Information Economics is currently edited by Ramona Wang

More articles in Journal of Information Economics from Anser Press
Bibliographic data for series maintained by Ramona Wang ().