Did the new Law for State-owned Firms affect those that are publicly traded?

This paper studies the effects of a new law aimed at state-owned enterprises in Brazil. In particular, it analyzes whether this legislation, promoting improved corporate governance, leads to a reduced perception of risks in the management of these companies and, therefore, in the volatility of their...

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Bibliographic Details
Published in:Revista Brasileira de Finanças 2020-04, Vol.18 (1), p.23-38
Main Authors: De Oliveira, Vitor Kayo, Holland, Marcio, Sampaio, Joelson O.
Format: Article
Language:English
Online Access:Get full text
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Summary:This paper studies the effects of a new law aimed at state-owned enterprises in Brazil. In particular, it analyzes whether this legislation, promoting improved corporate governance, leads to a reduced perception of risks in the management of these companies and, therefore, in the volatility of their stock returns. To do this, the ArCo (Artificial Counterfactual) methodology is applied, using high-dimensional panel time-series data from 2011 to 2018. Our results show that thirteen out of twenty stocks present a reduction in their volatility, six out of twenty stocks have contradictory results and one stock does not present a statistically significant result.
ISSN:1679-0731
1984-5146
DOI:10.12660/rbfin.v18n1.2020.79433