Template-Type: ReDIF-Paper 1.0
Author-Name:  Sergio G. Lazzarini
Author-Name-First: Sergio G.
Author-Name-Last: Lazzarini
Author-Name:  Aldo Musacchio
Author-Name-First: Aldo
Author-Name-Last: Musacchio
Title: Leviathan as a Minority Shareholder: A Study of Equity Purchases by the Brazilian National Development Bank (BNDES), 1995-2003
Abstract:  There is growing interest in how governments shape industries and influence firm performance. Using a database of 296 firms traded on the São Paulo stock exchange between 1995 and 2003, we find having BNDES (the Brazilian National Development Bank) as a minority owner to increase firms’ return on 
assets. This result is possibly due to the reduction in capital constraints provided by BNDES’ long-term equity. However, we find that the effect of BNDES’ equity is reduced when it is associated with state-owned and private-domestic pyramidal groups. Thus, our results suggest that minority stakes by a development bank can have a positive effect on performance as long as they promote long-term investments and are shielded from governmental interference and potential minority shareholder expropriation.
Length:  29 pages
Creation-Date:  2010
Order-URL: https://repositorio.insper.edu.br/handle/11224/5831
File-URL: https://repositorio.insper.edu.br/handle/11224/5831
File-Format: text/html
File-Function: Full text
Number: 095
Handle: RePEc:aap:wpaper:095