Corporate events’ performance and corporate governance : the Brazilian evidence

Purpose: The purpose of this paper is to investigate the relation between corporate governance and corporate events’ performance. Firms that engage in corporate events seem to perform at least as bad as similar firms that did not. Based on agency theory, the authors hypothesize that lower corporate performance is associated to differences in governance levels. Design/methodology/approach: Bessembinder and Zhang’s (2013) approach to evaluate the performance of corporate events has been expanded by considering unique corporate governance features from Brazilian stock market. Findings: The results suggest that after controlling for governance levels, event rms and control rms have similar performance. A number of analyses were performed to rule out alternative explanations. Originality/value: The results call attention for the role of agency costs in evaluating corporate events’ performance.