Asset revaluations,future firm performance and firm-level corporate governance arrangements: New evidence from Brazil |
| |
Authors: | Alexsandro Broedel Lopes Martin Walker |
| |
Institution: | 1. Mackenzie Presbyterian University, Rua Dr. Gabriel dos Santos, 794 – apto 111, São Paulo, 01231-010, Brazil;2. Mackenzie Presbyterian University, Rua São Bento, 545 – 5SL, São Paulo, 01011-904, Brazil |
| |
Abstract: | Using a sample of Brazilian listed firms for the period 1998–2004 we find evidence that revaluations of fixed assets are negatively related to future firm performance, prices and returns. We also find that the decision to revalue is negatively associated with scores on a Brazilian Corporate Governance Index (BCGI) and positively associated with indebtedness and illiquidity. Our results suggest that revaluations of fixed assets in Brazil are not designed to convey information to external users of financial statements but rather to improve equity positions – opportunistic motivations. Our evidence also corroborates the idea that firms that adopt superior voluntary governance arrangements are less likely to engage in actions designed to manipulate their financial statements. These results lend support to the recent amendment to the Company law which eliminated the revaluation option for Brazilian firms despite the current process of IFRS convergence. |
| |
Keywords: | |
本文献已被 ScienceDirect 等数据库收录! |
|