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Three Essays on Corporate Finance: Evidence from Brazil

Braga-Alves, Marcus V. (2008) Three Essays on Corporate Finance: Evidence from Brazil. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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In this study, we use some relatively unique characteristics of the Brazilian stock market to test corporate governance, capital structure, and payout decisions hypotheses. In Chapter One, we find that a composite index (NM6) that proxy for the main governance practices targeted by Bovespa's voluntary reform is statistically and economically related to higher market valuation. We also find that an investment strategy that bought stocks of better governed firms and sold stocks of poorly governed firms would have earned annual abnormal returns of 10.4 between 2001 and 2005. In Chapter Two, we examine how entrenchment is related to capital structure in a market characterized by closely held firms and significant separation between ownership and control. Our results support the hypothesis that entrenched insiders choose less levered capital structures to reduce the probability of bankruptcy or to elude external monitoring by debtholders. In Chapter Three, we examine the relation between firm characteristics and the choice of payout on equity. In Brazil, firms can distribute earnings to shareholders in the form of dividends or notional interest equity. Whereas dividends are not taxed at the personal level, the net tax effect of interest payments is lower because of their deductibility. Our results are consistent with the use of the notional interest on equity because of its tax deductibility despite the personal tax advantage of dividend payments.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
Braga-Alves, Marcus
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairShastri,
Committee CoChairMandelker, Gershon Nmandelke@katz.pitt.eduMANDELKE
Committee MemberZutter, Chad Jczutter@pitt.eduCZUTTER
Committee MemberSchlingemann, Frederik Pschlinge@katz.pitt.eduSCHLINGE
Committee MemberMorey, Matthew
Date: 30 June 2008
Date Type: Completion
Defense Date: 15 April 2008
Approval Date: 30 June 2008
Submission Date: 6 May 2008
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Institution: University of Pittsburgh
Schools and Programs: Joseph M. Katz Graduate School of Business > Business Administration
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: Brazil; capital structure; emerging markets; corporate governance; payout policy
Other ID:, etd-05062008-151629
Date Deposited: 10 Nov 2011 19:43
Last Modified: 15 Nov 2016 13:43


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