Do the corporate governance levels of BM&F BOVESPA increase the stock liquidity?

Authors

  • Ricardo Luiz Menezes Silva Accounting Department School of Economics, Business Administration and Accounting at Ribeirao Preto University of Sao Paulo
  • Paula Carolina Ciampaglia Nardi Assistant professor at School of Economics, Business Administration and Accounting - University of Sao Paulo (FEA/RP-USP) in the Accounting Department in Ribeirao Preto.
  • Vinícius Aversari Martins Assistant Professor at School of Economics, Business Administration and Accounting - University of Sao Paulo (FEA/RP-USP) in the Accounting Department in Ribeirao Preto.
  • Milton Barossi Filho Assistant Professor of Economics at the Department of Economics, School of Economics, Business Administration and Accounting - University of Sao Paulo (FEA/RP-USP) in Ribeirao Preto.

Keywords:

Liquidez de Ações, Governança Corporativa, BM&F BOVESPA.

Abstract

According to the agency theory, there is conflict of interest between the agent and the principal. To align these interests there are some mechanisms, such as the adoption of corporate governance practices. Recent research found a positive relationship between corporate governance and stock liquidity. The purpose of this article is to analyze whether the adherence of companies to the corporate governance levels of the BM&F BOVESPA increases the stock liquidity. For this, panel data regressions were estimated for three variables representing the liquidity. The results do not suggest that there is significant evidence of the impact of adherence to the corporate governance levels on the stock liquidity. The adherence of companies to governance levels does not provide a liquidity premium, which contradicts some studies. A likely explanation is based on the hypothesis of insufficient legal protection to investors and the Brazilian governance model, considering that the rules and principles required by the adherence to the governance levels of the stock exchange do not have the force of law.

Keywords: stock liquidity, corporate governance, BM&F BOVESPA.

Author Biography

Ricardo Luiz Menezes Silva, Accounting Department School of Economics, Business Administration and Accounting at Ribeirao Preto University of Sao Paulo

Bachelor (2006) and Master (2009) in Accounting at School of Economy, Business Administration and Accounting of Ribeirão Preto - University of Sao Paulo (FEA/RP-USP), and PhD in Accounting at School of Economy, Business Administration and Accounting - University of Sao Paulo (FEA-USP) (2013). Assistant professor at School of Economy, Business Administration and Accounting - University of Sao Paulo (FEA/RP-USP) in the Accounting Department in Ribeirao Preto. Major research line is about Quality of Accounting Information, concerning Disclosure and Compliance, Earnings Quality, Value-Relevance, Earnings Management, Timeliness and related areas in the national and international context. In addition, studies the economic consequences resulting from the IFRS adoption, and corporate governance practices.

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Published

2016-09-12

Issue

Vol. 13 No. 3 (2016): Jul/Sept

Section

Articles

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