Open AccessDid the new Law for State-owned Firms affect those that are publicly traded?
Author(s) -
Vitor Kayo de Oliveira,
Márcio Holland,
Joelson O. Sampaio
Publication year - 2020
Publication title -
revista brasileira de finanças
Language(s) - English
Resource type - Journals
eISSN - 1984-5146
pISSN - 1679-0731
DOI - 10.12660/rbfin.v18n1.2020.79433
Subject(s) - counterfactual thinking , stock (firearms) , volatility (finance) , corporate governance , business , legislation , panel data , financial economics , economics , monetary economics , accounting , finance , law , econometrics , political science , mechanical engineering , philosophy , epistemology , engineering
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.