The Relationships Between Governance and Risk in Brazilian Companies

Lameira, Valdir de Jesus

doi:10.7819/rbgn.v14i42.871

Cited by 1 publication

(4 citation statements)

References 1 publication

(1 reference statement)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It also follows Monte et al (2010) and Lameira (2012), who observes that the firms of the Novo Mercado have a level of risk different from the other corporate governance levels of the Brazilian stock exchange. Finally, we can observe that the variables representative of the firm’s systematic and non-systematic risks, together with its economic and financial returns, show significant associations, which allows us to make inferences concerning listing at the Novo Mercado level as a legitimation tool to risk and return in Brazil.…”

Section: Resultssupporting

confidence: 71%

“…Based on these analyzes, it is possible to verify that among the four levels of corporate governance of the Brazilian stock exchange, two of them stand out, either by the number of firms or by the differences of averages observed: Traditional and Novo Mercado levels. This It also follows Monte et al (2010) and Lameira (2012), who observes that the firms of the Novo Mercado have a level of risk different from the other corporate governance levels of the Brazilian stock exchange. Finally, we can observe that the variables representative of the firm's systematic and non-systematic risks, together with its economic and financial returns, show significant associations, which allows us to make inferences concerning listing at the Novo Mercado level as a legitimation tool to risk and return in Brazil.…”

Section: Corporate Governance and Its Associationsupporting

confidence: 85%

“…Concerning corporate governance quality, Lameira (2012) created an index composed of 20 binary questions about governance and analyzed its association with corporate risk. Their results converged to a negative relationship between risk and their governance index.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…In the related literature, it is common to identify studies analyzing the relationship between governance practices and variables such as risk (Monte et al, 2010; Milani, Righi, Ceretta, & Dias, 2012; Lameira, 2012; Jonghe, Disli, & Schoors, 2012) and return (Milani et al, 2012; Jonghe et al, 2012; Silva et al, 2012). In general, these studies point to a positive (negative) relationship between the adoption of corporate governance practices and return (risk).…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Firms’ legitimation through corporate governance and its association with risk and return in Brazil

Miranda

Melo²,

Martins

2021

RAUSP

View full text Add to dashboard Cite

Purpose This study aims to examine the listing of firms at the highest corporate governance level of the Brazilian stock exchange (B3) as a means of legitimation and its relationship with risk and return on investment. Design/methodology/approach This paper analyzes 205 companies from 2010 to 2019, in which firms listed at the Novo Mercado level were compared with groups composed of other firms traded on B3. Findings The main results demonstrate that a listing at the supposedly higher level of corporate governance in Brazil does not indicate lower risk, a higher return or even a better risk-return ratio. Research limitations/implications The findings are restricted to this sample, representing the association identified between the analyzed phenomena and not a cause-effect relationship. Practical implications The highest level of corporate governance in Brazil brings together firms that present a higher risk (at least systematic) and lower returns (at least financial) because they seek to legitimize themselves in the market as firms committed to better management practices. Social implications These findings are useful to investors, the stock exchange, regulatory agents and the companies themselves to reflect on the purpose and usefulness of different levels of corporate governance in Brazil. Originality/value This study differs from the others that relate corporate governance to risk or return because it does not deal individually with corporate governance practices, but rather the phenomenon that is listed in a special governance level, created by the stock exchange, serving as a kind of seal legitimation.

show abstract

Section: Resultssupporting

confidence: 71%

Section: Corporate Governance and Its Associationsupporting

confidence: 85%

Section: Hypothesis Developmentmentioning

confidence: 99%