PRIVATE EQUITY AND CORPORATE GOVERNANCE IN BRAZIL

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Abstract

This work studies how the activism of institutional investors, specifically private equity funds, influences the development of corporate governance in Brazil. We analyze the control and ownership structure of Brazilian publicly listed companies in order to identify the presence of private equity funds as shareholders. Corporate governance is evaluated through three alternative proxies: a broad governance index, listing on Novo Mercado and presence of American Depositary Receipts (ADRs). Our results indicate a positive influence of private equity funds on the quality of corporate governance practices in Brazil. Firms with private equity tend to have better governance index, and list more on Novo Mercado. There is a moderate relation between the stake of private equity in a company and ADR listing.

Keywords: Corporate Governance, Private Equity, Brazil

How to cite this paper: Carvalhal, A., & Souza, L. (2014). Private equity and corporate governance in Brazil. Corporate Ownership & Control, 12(1-1), 187-192. https://doi.org/10.22495/cocv12i1c1p4