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ECONOMETRIC ANALYSIS OF THE EFFECTS OF EQUITY CAPITALIZATION STRATEGIES ON BRAZILIAN COMPANIES PERFORMANCE

Otavio Prospero Sanchez, Elmo Tambosi Filho, Luis Carlos Domingos

DOI: 10.22495/cocv8i1c6p1

Abstract

This article explores the effect in performance of two types of firm financing strategies in Brazilian market, IPO and debentures. We use a fixed effects panel data analysis of 264 firms during the period from 2002 to 2008 to analyze how firms that performed IPO and issued debentures differentiate from others, in terms of Tobin Q. We found that firm that performed IPO have shown a negative effect on Tobin Q while firms that performed debentures, a popular financing strategy in Brazil, showed superior performance. These findings, while consistent with previous literature, make important contributions to the understanding of local market conditions given that Brazilian IPO have being very attention grabbing for international investors.

Keywords: Cost of Capital, Debentures, Developing Countries

How to cite this paper: Sanchez, O. P., Filho, E. T., & Domingos, L. C. (2010). Econometric analysis of the effects of equity capitalization strategies on Brazilian companies performance. Corporate Ownership & Control, 8(1-6), 583-589. http://dx.doi.org/10.22495/cocv8i1c6p1

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