Factors associated with the non-migration to the New Market of companies of the one share, one vote type

Abstract

This study aimed to understand which characteristics and listing rules relate with non-migration to the New Market (Novo Mercado) segment in companies that already obey the “one share, one vote” principle. The study sought to understand which governance characteristics, as well as the one share, one vote principle, represent challenges to listing in the New Market. Given the benefits of adhesion to the New Market shown in the literature and the existence of companies in the traditional segment that already meet one of the challenges to migration, namely the use of shares with only voting rights, the relevance of the study lies in showing which other governance characteristics may represent challenges to migration. The study indicates to regulators and markets which governance characteristics may represent challenges to adhesion to higher segments. This understanding may influence strategies for promoting better practices aimed at overcoming resistances to these governance rules. For the literature, the results show characteristics that warrant additional studies as they represent adoption challenges for companies. We chose the companies from the traditional segment that already have only common shares and with propensity score matching we chose comparable companies from the New Market. We observed variables related to the other New Market rules, ownership structure, pyramid structures, shareholder agreements, and the score in a comprehensive corporate governance index. The analyses involved descriptive statistics, differences of means and proportions tests, and logit models. The results show that the free float and minimum tag along rules have a strong relationship with the non-listing in the New Market of companies that already fulfill the one share, one vote rule. In addition, ownership concentration and corporate governance quality are also related to non-listing in the New Market.