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Dual-class unifications and corporate governance in Brazil

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  • Bortolon, Patrícia M.
  • Câmara Leal, Ricardo P.

Abstract

We investigate dual-class unifications in a period following the successful inception of a premium single-class listing segment. Firms that unified increased their market liquidity. Investment opportunities and shareholder rights convergence drove unification of firms that later joined the new premium list. Financial constraints impelled unification firms that remained in the least demanding list. All unified firms that joined the new list remained there five years later. Half of the others delisted or were in serious financial distress. The motivations for unification may differ according to the ability of firms to improve their corporate governance and transparency later.

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  • Bortolon, Patrícia M. & Câmara Leal, Ricardo P., 2014. "Dual-class unifications and corporate governance in Brazil," Emerging Markets Review, Elsevier, vol. 20(C), pages 89-108.
    • Handle: RePEc:eee:ememar:v:20:y:2014:i:c:p:89-108
    DOI: 10.1016/j.ememar.2014.06.003
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    2. Lélis Pedro Andrade & Aureliano Angel Bressan & Robert Aldo Iquiapaza, 2017. "Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(4), pages 1053-1092, December.

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    More about this item

    Keywords

    Dual-class shares unifications; Corporate governance; Ownership structure; Emerging markets; Brazil;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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