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This study investigates whether the governance attributes of Brazilian companies are associated with voluntary executive stock option (ESO) disclosure. Results show that Brazilian companies voluntarily disclose very little about their ESO plans, and that board size, presence of a compensation committee, and auditing by a Big 4 firm are significantly related to the degree of voluntary ESO disclosure. We also show that family-controlled companies in Brazil are associated with low voluntary ESO disclosure. Results are robust to a number of specification tests, dependent and explanatory variable measurements, and sample composition. This study has professional and regulatory implications for Brazil and other emerging capital markets. The results underscore the need for stricter rules for executive compensation reporting in Brazil, and they invite policy makers and regulators in emerging markets to consider the effects of company-level governance factors on disclosure incentives.

This work examines the determining factors affecting the timing of disclosures in quarterly and annual financial statements of Brazilian companies with shares that are listed on the Sao Paulo Stock Exchange with shares that composed the São Paulo Stock Exchange Index (IBOVESPA) during the period 1/1997 -2/2009. The determining factors were grouped into the following four dimensions: the complexity of operations, the characteristics of corporate governance, the level of information asymmetry, and the proprietary costs and statement content. With a final sample of 83 companies (1585 observations), the effects of 13 explanatory variables on the timing of disclosures in financial statements were examined using panel data methods; the variables examined included leverage control, company size, level of corporate governance, institutional ownership, financial statement consolidation, volatility, and losses. The main findings suggest that disclosing consolidated statements and/or statements that include losses has a positive effect on the timing of the disclosure, corroborating the hypothesis that disclosure timing is positively affected by greater complexity in operations and by the content of the statements (in this case, "bad news"). Control of the leverage variable, in turn, was shown to be negatively related to disclosure timing, suggesting that there may be a substitution relationship between these variables. Contrary to theoretical expectations, volatility displayed positive and statistically significant coefficients. However, upon the application of the instrumental variables method to obtain consistent estimates when there is simultaneity between volatility and disclosure timing, the volatility variable exhibited a negative coefficient and was statistically non-significant.

Este artigo investiga, através de um estudo de eventos, se a divulgação das informações contidas nas demonstrações financeiras, anuais e trimestrais, das empresas de capital aberto com ações negociadas na Bolsa de Valores de São Paulo (Bovespa) afeta igualmente as empresas em geral e aquelas com sinalizadores diferenciados de boas práticas de governança corporativa. Foram analisadas 3.682 observações coletadas durante o período 1995-2002, representando as empresas com maior liquidez na Bovespa. Oito subamostras foram extraídas da amostra total, com a finalidade de verificar a reação dos investidores em relação à divulgação das demonstrações financeiras desses diferentes segmentos de empresas. Os resultados empíricos revelam que os investidores reagem de forma diferenciada a alguns sinalizadores de boas práticas de governança corporativa das empresas. Foi possível perceber retornos anormais significativos apenas em duas subamostras (empresas pontuais na divulgação das suas demonstrações financeiras e empresas privadas) em relação aos seus pares (empresas que atrasaram a divulgação das suas demonstrações financeiras e empresas estatais).

Manuscript type EmpiricalResearch Question/Issue This study investigates the interplay between country-level governance quality and the capital structure choice at the firm level in Brazil and Chile. We examine the association between a firm's ownership concentration and its debt maturity structure and whether country-level governance quality influences this association.Research Findings/Insights Using a large firm-level dataset from Brazil and Chile for the period 2008-2013, we find a positive association between low ownership concentration and debt maturity. However, this association becomes negative when the largest shareholder has high ownership concentration. This result suggests that long-term debt and ownership concentration act as substitute monitoring mechanisms. Moreover, debt maturity is inversely related to our aggregated index of country-level governance quality, suggesting that in countries with governance systems that effectively protect debt holders, firms with high benefits of control (high ownership concentration) will use debt with shorter repayment periods in order to benefit from frequent monitoring by debt holders. Overall, our results support the view that financial markets tend to pressure firms with high benefits of control or greater agency conflict to make a tradeoff between the benefits of control and the cost and maturity structure of debt financing.Theoretical/Academic Implications This study contributes to the research on comparative corporate governance and capital structure. We also respond to recent calls to bridge the gap between under-and over-socialized views of corporate governance by examining the interplay between firm-and country-level governance variables. Our findings suggest a substitution effect between monitoring by equity holders and by debt holders, and that country-level governance quality exerts a disciplinary influence over a firm's choice of debt maturity structure.Practitioner/Policy Implications Investors seeking to enter emerging markets such as Brazil and Chile can benefit from considering national governance factors that enhance debt holders' external monitoring effectiveness. Because our findings show the importance of considering and improving the quality of country-level governance, they are also useful for policy makers aiming to reform corporate governance practices in emerging markets.

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Este estudo identificou o papel do ambiente nacional (Macroeconomia, Desenvolvimento Financeiro e Qualidade Institucional) e das características dos setores de atividade (Munificência, Dinamismo, Concentração, Ciclo de Vida, Dispersão da Eficiência Tecnológica, Dispersão da Qualidade dos Produtos, Poder de Barganha dos Clientes e Poder de Barganha dos Fornecedores) sobre o endividamento de 612 companhias abertas de sete países da América Latina (Argentina, Brasil, Chile, Colômbia, México, Peru e Venezuela). Para fins de comparação, estende-se a análise, também, a 847 companhias dos Estados Unidos. O período estudado é o de 1996-2009 e, para a análise, utiliza-se o Modelo Linear Hierárquico, que permite controlar os efeitos de acordo com o nível das variáveis (país, setor, tempo e firma). Os resultados sugerem que o Desenvolvimento Financeiro facilita o acesso a recursos de terceiros e que a Qualidade Institucional é negativamente relacionada com a Alavancagem das empresas. Encontraram-se, também, evidências de que a Qualidade Institucional pode promover o desenvolvimento assimétrico entre o mercado acionário e o de crédito.

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