Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms
Autor(a) principal: | |
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Data de Publicação: | 2022 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng por |
Título da fonte: | BBR. Brazilian Business Review (English edition. Online) |
Texto Completo: | http://www.bbronline.com.br/index.php/bbr/article/view/712 |
Resumo: | This article investigates whether the concentration of stock ownership affects the presence and intensity of covenants in the debt contracts of companies listed on the B3 stock exchange in the 2007-2018 period. We also present an overview of the presence and breach of covenants by these firms. For this purpose, we manually analyzed more than 4,000 explanatory notes for the firms’ financial statements regarding loans and financing and then applied linear and nonlinear regression models. We found that greater ownership concentration is associated with higher likelihood of the presence of covenants, corroborating the role of the ownership structure as a substitute governance mechanism that allows for aligning interests and reduces the need for using covenants. The results are useful to managers, creditors, and shareholders, by showing which characteristics are determinants of the use of covenants, supporting management of factors that can reduce their occurrence, and bring greater flexibility to the corporate decision-making process, directly maximizing the value to shareholders. |
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Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed FirmsConcentração de Propriedade e Outros Determinantes da Presença de Covenants em Contratos de Dívida de Companhias Listadas na B3CovenantsCovenant SlackOwnership ConcentrationWaiversAgency CostsCovenantsCovenant SlackConcentração de PropriedadeWaiversCustos de AgênciaThis article investigates whether the concentration of stock ownership affects the presence and intensity of covenants in the debt contracts of companies listed on the B3 stock exchange in the 2007-2018 period. We also present an overview of the presence and breach of covenants by these firms. For this purpose, we manually analyzed more than 4,000 explanatory notes for the firms’ financial statements regarding loans and financing and then applied linear and nonlinear regression models. We found that greater ownership concentration is associated with higher likelihood of the presence of covenants, corroborating the role of the ownership structure as a substitute governance mechanism that allows for aligning interests and reduces the need for using covenants. The results are useful to managers, creditors, and shareholders, by showing which characteristics are determinants of the use of covenants, supporting management of factors that can reduce their occurrence, and bring greater flexibility to the corporate decision-making process, directly maximizing the value to shareholders.O trabalho objetiva investigar se o nível de concentração de propriedade determina a presença e a intensidade de covenants em contratos de dívida de companhias listadas na B3 no período 2007-2018. Também buscamos apresentar um amplo panorama da presença e da quebra de covenants por essas companhias. Para tanto, analisamos manualmente mais de 4000 notas explicativas de empréstimos e financiamentos e utilizamos modelos de regressão lineares e não lineares. Verificamos que quanto maior a concentração de propriedade, menor a probabilidade da presença de covenants, corroborando o papel da estrutura de propriedade como mecanismo substituto de governança capaz de alinhar interesses e reduzir a necessidade da utilização de covenants. Os resultados são úteis para gestores, credores e acionistas ao evidenciar quais características são determinantes da utilização de covenants, auxiliando na gestão de fatores que podem reduzir a sua ocorrência e trazer maior flexibilidade para o processo de tomada de decisão da empresa, impactando diretamente na maximização de valor ao acionista.FUCAPE Business Shool2022-07-14info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionPeer-reviewed ArticleArtigo revisado pelos paresapplication/pdfapplication/pdfhttp://www.bbronline.com.br/index.php/bbr/article/view/71210.15728/bbr.2022.19.4.2.ptBrazilian Business Review; Vol. 19 No. 4 (2022): July to August 2022; 372-395Brazilian Business Review; v. 19 n. 4 (2022): Julho a Agosto de 2022; 372-3951808-23861807-734Xreponame:BBR. Brazilian Business Review (English edition. Online)instname:Fucape Business School (FBS)instacron:FBSengporhttp://www.bbronline.com.br/index.php/bbr/article/view/712/1065http://www.bbronline.com.br/index.php/bbr/article/view/712/1066Copyright (c) 2022 Brazilian Business Reviewhttp://creativecommons.org/licenses/by/4.0info:eu-repo/semantics/openAccessAlbanez, TatianaSchiozer, Rafael2022-07-21T20:07:14Zoai:ojs.pkp.sfu.ca:article/712Revistahttps://www.bbronline.com.br/index.php/bbr/indexONGhttp://www.bbronline.com.br/index.php/bbr/oai|| bbronline@bbronline.com.br1808-23861808-2386opendoar:2022-07-21T20:07:14BBR. Brazilian Business Review (English edition. Online) - Fucape Business School (FBS)false |
dc.title.none.fl_str_mv |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms Concentração de Propriedade e Outros Determinantes da Presença de Covenants em Contratos de Dívida de Companhias Listadas na B3 |
title |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms |
spellingShingle |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms Albanez, Tatiana Covenants Covenant Slack Ownership Concentration Waivers Agency Costs Covenants Covenant Slack Concentração de Propriedade Waivers Custos de Agência |
title_short |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms |
title_full |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms |
title_fullStr |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms |
title_full_unstemmed |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms |
title_sort |
Ownership Concentration and other Determinants of Covenants in Debt Contracts of Brazilian Publicly Listed Firms |
author |
Albanez, Tatiana |
author_facet |
Albanez, Tatiana Schiozer, Rafael |
author_role |
author |
author2 |
Schiozer, Rafael |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Albanez, Tatiana Schiozer, Rafael |
dc.subject.por.fl_str_mv |
Covenants Covenant Slack Ownership Concentration Waivers Agency Costs Covenants Covenant Slack Concentração de Propriedade Waivers Custos de Agência |
topic |
Covenants Covenant Slack Ownership Concentration Waivers Agency Costs Covenants Covenant Slack Concentração de Propriedade Waivers Custos de Agência |
description |
This article investigates whether the concentration of stock ownership affects the presence and intensity of covenants in the debt contracts of companies listed on the B3 stock exchange in the 2007-2018 period. We also present an overview of the presence and breach of covenants by these firms. For this purpose, we manually analyzed more than 4,000 explanatory notes for the firms’ financial statements regarding loans and financing and then applied linear and nonlinear regression models. We found that greater ownership concentration is associated with higher likelihood of the presence of covenants, corroborating the role of the ownership structure as a substitute governance mechanism that allows for aligning interests and reduces the need for using covenants. The results are useful to managers, creditors, and shareholders, by showing which characteristics are determinants of the use of covenants, supporting management of factors that can reduce their occurrence, and bring greater flexibility to the corporate decision-making process, directly maximizing the value to shareholders. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-07-14 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion Peer-reviewed Article Artigo revisado pelos pares |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://www.bbronline.com.br/index.php/bbr/article/view/712 10.15728/bbr.2022.19.4.2.pt |
url |
http://www.bbronline.com.br/index.php/bbr/article/view/712 |
identifier_str_mv |
10.15728/bbr.2022.19.4.2.pt |
dc.language.iso.fl_str_mv |
eng por |
language |
eng por |
dc.relation.none.fl_str_mv |
http://www.bbronline.com.br/index.php/bbr/article/view/712/1065 http://www.bbronline.com.br/index.php/bbr/article/view/712/1066 |
dc.rights.driver.fl_str_mv |
Copyright (c) 2022 Brazilian Business Review http://creativecommons.org/licenses/by/4.0 info:eu-repo/semantics/openAccess |
rights_invalid_str_mv |
Copyright (c) 2022 Brazilian Business Review http://creativecommons.org/licenses/by/4.0 |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf application/pdf |
dc.publisher.none.fl_str_mv |
FUCAPE Business Shool |
publisher.none.fl_str_mv |
FUCAPE Business Shool |
dc.source.none.fl_str_mv |
Brazilian Business Review; Vol. 19 No. 4 (2022): July to August 2022; 372-395 Brazilian Business Review; v. 19 n. 4 (2022): Julho a Agosto de 2022; 372-395 1808-2386 1807-734X reponame:BBR. Brazilian Business Review (English edition. Online) instname:Fucape Business School (FBS) instacron:FBS |
instname_str |
Fucape Business School (FBS) |
instacron_str |
FBS |
institution |
FBS |
reponame_str |
BBR. Brazilian Business Review (English edition. Online) |
collection |
BBR. Brazilian Business Review (English edition. Online) |
repository.name.fl_str_mv |
BBR. Brazilian Business Review (English edition. Online) - Fucape Business School (FBS) |
repository.mail.fl_str_mv |
|| bbronline@bbronline.com.br |
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