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dc.titleMonitoring the Governance of State-Owned Enterprises: Assessing the Impact of Brazilian Corporate Governance Reforms
dc.contributor.authorCoelho, Daphne
dc.contributor.authorTeodorovicz, Thomaz
dc.contributor.authorMartínez Fritscher, André
dc.contributor.authorMotta Café, Renata
dc.contributor.authorLazzarini, Sergio
dc.contributor.authorIkawa, Jorge Norio Rezende
dc.contributor.orgunitFiscal Management Division
dc.coverageBrazil
dc.coverageSouth America
dc.coverageLatin America and the Caribbean
dc.date.available2024-05-29T00:05:00
dc.date.issue2024-05-29T00:05:00
dc.description.abstractState-owned enterprises (SOEs) are often justified for correcting market failures, providing essential public services, and fulfilling social objectives. Yet, SOEs face unique governance challenges as agency conflicts usually increase with state ownership. This paper examines Brazil's efforts to address agency conflicts in SOEs, including new legislation (Law 13303 of 2016, the “Law on SOEs”) establishing stringent criteria for the appointment of executives and for the accountability and a complementary monitoring mechanism known as IG-SEST. Using the difference-in-differences methodology, we assess the impact of those interventions on SOEs profitability and labor productivity. Although no significant effect of the more-stringent governance requirements of the Law on SOEs was detected, the group of federal SOEs, which adopted the IG-SEST monitoring mechanism, significantly increased their profitability compared to similar municipal and state SOEs. Because IG-SEST anchored its indicators in corporate governance parameters specified in the Law on SOEs, this result can be interpreted as potential evidence that institutional changes might require complementary mechanisms for effective implementation. These findings are consistent with previous work suggesting that corporate governance might require broader institutional reforms, including fiscal policies to mitigate government action with a negative effect on the performance and solvency of SOEs.
dc.format.extent47
dc.identifier.doihttp://dx.doi.org/10.18235/0012994
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Monitoring-the-Governance-of-State-Owned-Enterprises-Assessing-the-Impact-of-Brazilian-Corporate-Governance-Reforms.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectState-Owned Enterprise
dc.subjectCorporate Governance
dc.subjectSmall Business
dc.subjectGovernance
dc.subjectLabor Productivity
dc.subjectTransparency and Anticorruption
dc.subjectEconomy
dc.subject.jelcodeG34 - Mergers • Acquisitions • Restructuring • Corporate Governance
dc.subject.jelcodeH11 - Structure, Scope, and Performance of Government
dc.subject.jelcodeH83 - Public Administration • Public Sector Accounting and Audits
dc.subject.jelcodeL32 - Public Enterprises • Public-Private Enterprises
dc.subject.keywordsstate-owned enterprises;state ownership;state capitalism;corporate governance;corporate governance reform
idb.identifier.pubnumberIDB-WP-01590
idb.operationRG-E1808
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