The evolution of corporate governance in Brazil

Bernard Black, Antonio Gledson de Carvalho and Joelson Sampaio ()

Emerging Markets Review, 2014, vol. 20, issue C, 176-195

Abstract: We use extensive hand collected surveys reporting governance practices of Brazilian firms in 2004, 2006, and 2009 to build a broad corporate governance index and analyze the evolution of corporate governance in Brazil and the association between governance and firm value. We find that corporate governance practices improved significantly over this period. This evolution is due to two main factors: 1) growth in Novo Mercado and Level II (NM&L2) listings, mainly through IPOs by new firms, and 2) improved practices at non-NM&L2 firms, principally through adopting governance elements required for NM&L2 listing. Governance practices for firms already listed on NM&L2 were stable. Adoption of the elements of our governance index that are required for NM&L2 listing predicts higher firm value. In contrast, adoption of the remaining elements of our index does not predict firm value. Thus, governance changes appear to respond to investor preferences.

Keywords: Brazil; Corporate governance; Boards of directors; Minority shareholders (search for similar items in EconPapers)
JEL-codes: G18 G30 G34 G39 K22 K29 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:20:y:2014:i:c:p:176-195

DOI: 10.1016/j.ememar.2014.04.004

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