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http://hdl.handle.net/1843/50505| Type: | Artigo de Periódico |
| Title: | Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
| Other Titles: | Dual class shares board of directors effectiveness and firm s market value: an empirical study |
| Authors: | Lélis Pedro de Andrade Aureliano Angel Bressan Robert Aldo Iquiapaza |
| Abstract: | This study aims to identify whether a relationship exists between the controlling shareholders’ voting power and outside directors’ effectiveness in maximizing firms’ financial performance. We analyze a panel data with 3057 observations for the 2000–2012 period using a random effects model, logit and probit regressions, and the two-stage model of Heckman in the Brazilian stock market. Our findings show that firms whose controlling shareholders use dual class shares to leverage their voting power have less independence from the board and worse financial performance and market value. Further, the percentage of outside directors tends to be ineffective in increasing the firm’s value, and in changing the firm’s chief executive officer (CEO) when (1) the controlling shareholder’s voting power is leveraged, or (2) when the CEO assumes a position on the board of directors simultaneously. We interpreted that these results are in line with the arguments in favor of the existence of a new agency cost, which is related to the undue obedience of board members to authority, such as the largest controlling shareholder or the CEO in Brazilian listed firms. |
| Subject: | Administração de empresas |
| language: | eng |
| metadata.dc.publisher.country: | Brasil |
| Publisher: | Universidade Federal de Minas Gerais |
| Publisher Initials: | UFMG |
| metadata.dc.publisher.department: | FCE - DEPARTAMENTO DE CIÊNCIAS ADMINISTRATIVAS |
| Rights: | Acesso Aberto |
| metadata.dc.identifier.doi: | 10.1007/s10997-017-9375-7 |
| URI: | http://hdl.handle.net/1843/50505 |
| Issue Date: | 2017 |
| Appears in Collections: | Artigo de Periódico |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| Dual class shares, board of directors’ effectiveness and firm’s market value an empirical study - s10997-017-9375-7-2.pdf | 619.71 kB | Adobe PDF | View/Open |
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