Blockholders and firm value: Evidence from Brazil

Abstract

This research analyzes the relationship between the presence of blockholders and the value of Brazilian firms. Our analysis comprises all non-financial listed firms in Brazil with data available in the period 2010-2019 (i.e., 1,091 firm-year observations). We estimate Ordinary Least Squares (OLS) models with firm fixed effects and use Propensity Score Matching (PSM) to pair sub-samples and mitigate selection bias concerns. Our results suggest a negative association between Tobin's Q and the presence of blockholders. Our findings contradict previous studies using samples of international firms but corroborate previous studies using Brazilian firms. We also find that companies with blockholders of the family-type have Tobin's Q lower than the other types.