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Market Efficiency and Organizational Corruption: Study on the Impact on Shareholder Value

Author

Listed:
  • Renata Crosara Miari

    (FUMEC University)

  • José Marcos Carvalho de Mesquita

    (FUMEC University)

  • Daniel Jardim Pardini

    (FUMEC University)

Abstract

With this study, we evaluated the influence of disclosure of the involvement of organizations in corruption on creating value for shareholders. We chose four companies that had their names linked to allegations of corruption in the past 10 years. An event study was used to verify if relevant information tends to be immediately reflected in stock prices. We selected 28 events for analysis and we observed negative and positive variations of the securities in relation to the market, in the days before the disclosure, as in most of the 20 days after publication. However, in cumulative terms, there was a rise in prices over time, returning to levels near those observed before advertising the event. The results indicate that the market did not behave efficiently in this analyzed period.

Suggested Citation

  • Renata Crosara Miari & José Marcos Carvalho de Mesquita & Daniel Jardim Pardini, 2015. "Market Efficiency and Organizational Corruption: Study on the Impact on Shareholder Value," Brazilian Business Review, Fucape Business School, vol. 0(2), pages 1-23, August.
    • Handle: RePEc:bbz:fcpbbr:v:specialissue:y:2015:i:2:p:1-23
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    References listed on IDEAS

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    1. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages 632-652, November.
    2. Arvind K. Jain, 2001. "Corruption: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 71-121, February.
    3. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
    4. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
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    Cited by:

    1. Christina Philippou, 2019. "Towards a unified framework for anti-bribery in sport governance," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 16(2), pages 83-99, July.

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