Essays on government ownership in publicly traded companies in Brazil

• Autor(a) principal: Bianchi, Martha Regina Meira
• Data de Publicação: 2022
• Tipo de documento: Tese
• Idioma: eng
• Título da fonte: Biblioteca Digital de Teses e Dissertações da USP
• Texto Completo: https://www.teses.usp.br/teses/disponiveis/12/12136/tde-23012023-201610/
• topic: Empresas estatais; Finanças; Governança Corporativa; Mercado de capitais; Participação estatal

The States participation in the economy has been intensely discussed, especially in Brazil with several crises involving the actions of the Brazilian government. After all, the State interven- tion in publicly traded firms is associates with control and monitoring inefficiencies of business activities. Thus, political interference can distort the primary objectives of companies in favor of political or electoral goals. Besides inefficiency issues, recent corruption scandals involving public authorities and private companies in Brazil rekindle the debate on how much the State should be involved in productive activities. Brazil has gone through long periods of privatization but still exerts considerable influence on companies. My research pursues to map the influence of the Brazilian government through the shareholding structure of companies and the possible influence that the government has on key aspects of their management, such as CEO compen- sation. Furthermore, I analyzed through an event study whether the stock market reacted to legislative attempts to curb abuses in State-Owned Enterprises (SOEs) with the enactment of Law 13,303/2016. The Brazilian SOEs Law is known for tightening the rules of governance and other aspects for state-controlled companies. I analyzed all publicly traded Brazilian com- panies over 10 years (2010 to 2019) and classified Brazilian government ownership into direct and indirect, besides the different voting rights in some companies. Although the Brazilian government controlled only 24 publicly traded companies during this period, the Brazilian gov- ernment owned shares in 26% of the sample, directly or indirectly. In my research, I found evidence that the Brazilian government ownership is negatively related to CEO compensation. Although there is no evidence that political crises can increase this negative relationship, fi- nancial crises, represented by the years 2015-2016, seem to have some influence depending on the type of government ownership. When there is a direct government ownership, the negative relationship between executive compensation and state participation during financial crises is accentuated. But when the government has shares indirectly, the relationship is positive and sig- nificant, especially for non-voting and total shares (voting and non-voting shares). The impact of the enactment and commencement of Law 13,303/2016 generated an abnormal positive cu- mulative return for fully Brazilian SOEs during the events. During the Senate bills discussion, there is no abnormal returns around the event date. These results contribute to the discussion of the role of the state in the capital market, especially related to executive compensation, an im- portant governance tool that aims to align the interests of managers and shareholders. With the classification between different government ownership in Brazilian publicly traded companies, future research can use this categorization. Still, it is possible to show that the market seems to react positively to attempts at stricter controls and fighting corruption in Brazilian state-owned companies.