Improved corporate governance: market reaction and liquidity implications

Gonzalo Chavez ()
Additional contact information
Gonzalo Chavez: Instituto de Empresa

Working Papers Economia from Instituto de Empresa, Area of Economic Environment

Abstract: We study the market price reaction and liquidity impact that firms experience when they are incorporated into the differentiated corporate governance listing segments of the Sao Paulo Stock Exchange. The Brazilian market is of special interest since it allows us to analyze the effect of improved governance while keeping the market microstructure unchanged. The market price reaction is positive and significant when a firm announces its decision to commit to greater transparency and minority shareholder protection. We also find that shares with voting rights experience a stronger price reaction than non-voting shares.

Keywords: Corporate governance; Emerging markets; Event study; Liquidity costs; Special segments (search for similar items in EconPapers)
Pages: 24 pages
Date: 2006-02
New Economics Papers: this item is included in nep-fmk
References: Add references at CitEc
Citations:

Downloads: (external link)
http://latienda.ie.edu/working_papers_economia/WP06-08.pdf (application/pdf)

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:emp:wpaper:wp06-08

Access Statistics for this paper

More papers in Working Papers Economia from Instituto de Empresa, Area of Economic Environment Contact information at EDIRC.
Bibliographic data for series maintained by Amada Marcos ( this e-mail address is bad, please contact ).