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Dual-Class Unifications and Corporate Governance in Brazil

Authors
Journal
Emerging Markets Review
1566-0141
Publisher
Elsevier
Identifiers
DOI: 10.1016/j.ememar.2014.06.003
Keywords
  • Dual-Class Shares Unifications
  • Corporate Governance
  • Ownership Structure
  • Emerging Markets
  • Brazil

Abstract

Abstract We investigate dual-class unifications in a period following the successful inception of a premium single-class listing segment. Firms that unified increased their market liquidity. Investment opportunities and shareholder rights convergence drove unification of firms that later joined the new premium list. Financial constraints impelled unification firms that remained in the least demanding list. All unified firms that joined the new list remained there five years later. Half of the others delisted or were in serious financial distress. The motivations for unification may differ according to the ability of firms to improve their corporate governance and transparency later.

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