Corporate governance and efficiency in the Electricity Sector using Data Envelopment Analysis: a study in the brazilian stock market

Different Corporate Governance mechanisms have been suggested to minimize agency problems between managers and shareholders, and between controlling and minority shareholders. The aim of this study is to analyze the corporate governance mechanisms result in greater efficiency for Brazilian stock com...

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Published in:Revista de Ciencias da Administracao 2011-12, Vol.13 (31), p.161-189
Main Authors: Peixoto, Fernanda Maciel, Ferreira, Roberto do Nascimento, Lopes, Ana Lúcia Miranda, Fagundes, André Francisco Alcântara
Format: Article
Language:eng ; por
Subjects:
Cash flow
Corporate governance
Costs
Data envelopment analysis
Efficiency
efficiency and data envelopment analysis
eficiência
Electricity
governança corporativa
Hypotheses
Influence
Securities markets
Stock exchanges
Stockholders
Studies
Variables
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Summary:Different Corporate Governance mechanisms have been suggested to minimize agency problems between managers and shareholders, and between controlling and minority shareholders. The aim of this study is to analyze the corporate governance mechanisms result in greater efficiency for Brazilian stock companies in the electricity sector, in 2007-2009. The hypothesis to be verified is that the lower the voting concentration   and the dependence of the council, and the greater the cash flow concentration, the greater the performance of the company will be. The analyzed sample involved thirty-three companies, fourteen being classified into one of the levels of CG (Level 1, Level 2 or New Market) and the remainder being members of the traditional market. To measure the efficiency of the companies, the non-parametric DEA (Data Envelopment Analysis) method was used, and to relate the efficiency with the governance variables, we adopted regression analysis of panel data. The results demonstrated that the use of CG mechanisms positively influences business efficiency, but not in the expected magnitude. It was found that the cash flow concentration is positively related to the efficiency of firms, supporting the governance literature. For future work, the use of other input and output variables is suggested.
ISSN:1516-3865
2175-8077
1516-3865
DOI:10.5007/2175-8077.2011v13n31p161