Corporate governance and firm valuation in Brazil

This paper investigates the relationship between the quality of a firm’s corporate governance and firm valuation, as measured by Tobin’s Q, for Brazilian firms listed on the BM&FBovespa from 2010 to 2014. A corporate governance index is constructed from a set of five sub-indices which were compiled from publicly available information. The indices have been used to determine how corporate governance practises have evolved over the period. The results of the study show a positive and significant relationship between firm value and greater overall corporate governance in Brazilian listed firms, as well as the component sub-indices.