Differential pricing of equity classes, majority control, and corporate governance: evidence from brazilian privatized companies
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2005-11-24
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We examine price differences between different equity classes in listed companies in Brazil with particular emphasis on privatized companies, and discusses the role of majority control, liquidity, and governance issues that may influence these differentials over time. We also include a brief discussion on the Brazilian corporate law system, its effects on the shareholders, and the characteristics of the Brazilian privatization process, before proceeding to the econometric analysis. We find empirical evidence to support that non-voting equity to total equity, liquidity, type of majority control, and changes in regulation are significant in determining equity prices differential.