Revista Brasileira de Gestao de Negocios | 2026
Authors: Souza V.G.; Barbedo C.H.S.; Simões J.J.F.
DOI: 10.7819/rbgn.v27i4.4322
Journal: Revista Brasileira de Gestao de Negocios
Year: 2026
Publisher: Fundacao Escola de Comercio Alvares Penteado
Document Type: Article
Open Access: All Open Access; Gold Open Access
Cited by: 0
Purpose – This study examines how the Brazilian stock market reacts to pivotal events related to the State-Owned Enterprises Law, including both governanceenhancing milestones and regulatory relaxations. It investigates whether ownership structure, governance levels, and listing segments influence investor responses. Theoretical framework – Rooted in agency theory, the study explores how principalagent conflicts, particularly in politically influenced state-owned enterprises, can affect firm performance and market behavior. The State-Owned Enterprises Law aimed to mitigate such inefficiencies through governance reforms. Design/methodology/approach – We apply an event study methodology and difference-in-differences (DID) techniques to analyze the abnormal stock returns of 107 B3-listed companies during four pivotal events related to the State-Owned Enterprises Law, encompassing both its enactment and its subsequent weakening. Findings – The results reveal positive cumulative abnormal returns (CARs) following governance-enhancing events, suggesting market confidence in improved oversight and reduced political interference. Conversely, events signaling a rollback of the law’s provisions, particularly the day the Chamber of Deputies approved the 2022 bill easing board appointment criteria, generated negative CARs, indicating concerns over transparency and governance quality. Practical & social implications of the research – The findings highlight the sensitivity of asset prices to governance regulations in emerging markets. They reinforce the importance of institutional safeguards in reducing agency conflicts and protecting investor interests in state-owned enterprises. Originality/value – This study contributes to the limited empirical literature on how Brazilian capital markets interpret corporate governance reforms. It offers new evidence on the roles of regulation, ownership structure, and governance quality in shaping market dynamics. © 2026, Fundacao Escola de Comercio Alvares Penteado. All rights reserved.
capital markets; corporate governance; event study; Financial performance