Factors affecting stock liquidity: corporate governance, ADRs and economic crisis
Listing for trading in one of the segments of the BM&FBovespa requiring enhanced corporate governance can be seen as a way to align the interests of agents and principals. One of the supposed benefits of adhesion to these segments is increased stock liquidity. This study analyzes a sample of firms listed on the BM&FBovespa through panel data with Huber-White correction. The hypotheses are a positive relation between listing in one of these segments and liquidity, and that the higher the governance level, the greater the effect on liquidity. The results indicate that in the period before the 2008 crisis, the companies as a whole listed in the special governance segments had more liquid shares. But this result extends only to firms listed in the Level 1 and Novo Mercado segments when the three segments are analyzed individually. The hypotheses could not be confirmed in the entire period analyzed, from 2000 to 2009, possibly because of the effects of the crisis. For companies traded in the Level 2 segment, higher liquidity was not observed in the periods studied. Additionally, companies with ADRs showed higher liquidity in relation to those listed in the enhanced governance segments, independent of the effects of the crisis.