ADRS, Differentiated Levels of Corporate Governance of the São Paulo Stock Exchange, and the Performance of Publicly Traded Brazilian Companies

We investigate whether improvement in Brazilian corporate governance practices is related to better performance of companies measured in its diverse dimensions. Dummy variables were used to identify firms with level 2 or 3 ADR programs and to represent participation in level 2 or the “new market” level of differentiated practices of corporate governance established by the São Paulo Stock Exchange. Significant statistical relationships were obtained for both dummy variables in relation to the performance measures, suggesting that the adhesion to programs which require improved corporate governance practices is associated with corporate performance