Download or read book Corporate Governance Quality and Firm Value in Brazil written by Alexandre Di Miceli da Silveira and published by . This book was released on 2007 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the influence of corporate governance quality on market value of 154 Brazilian listed companies in 2002. In order to obtain a proxy for corporate governance quality, a broad governance index was built. The investigation was carried out by different econometric approaches in increasing order of complexity, including multiple regressions by Ordinary Least Squares (OLS), instrumental variables approach and systems of simultaneous equations. The results obtained in all econometric approaches show a positive and significant influence of corporate governance quality on firm's market value. OLS results with market value variables Tobin's Q and PBV multiple suggest that, ceteris paribus, a worst-to-best change in governance quality would result in a market capitalization increase of around 85% and 100%, respectively. The paper also finds evidence of corporate governance variable endogeneity and proposes different instruments for estimation by instrumental variables approach. Moreover, results by simultaneous equation approach indicate a relation of reverse causality between corporate governance quality and firm valuation.