Are pension funds good monitors?
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Redalyc
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| Natura: | Artículo científico |
| Lingua: | en |
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Universidade de São Paulo
2018
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| _version_ | 1876423329599979520 |
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| author | Igor Bernardi Sonza |
| author_facet | Igor Bernardi Sonza |
| contents | Are pension funds good monitors? Igor Bernardi Sonza Alberto Granzotto Administración y Contabilidad Performance Pension funds Control structure Pension funds, when they acquire common shares of companies in the capital markets, start to participate more actively in the decision-making of boards of directors and, through their representatives, in the monitoring of managers. The aim of this study is to determine whether pension funds are good monitors. This is done by identifying the influence of the control structure of pension funds over the financial performance and the market value of Brazilian public companies. Using dynamical models of linear and non-linear regressions estimated by GMM-Sys in an unbalanced panel from 1995 to 2015, it is shown that pension funds do not play a good monitoring role, as the control structure of these funds is negatively related to the financial performance of a company or, in other words, the higher the stake, the worse the performance of the company. A possible reason for this is that pension funds invest in the capital markets for portfolio diversification, are not concerned with specific decision-making in companies and have few monitoring skills, thus generating conflicts that go against the objective of maximizing the value of the company. Also, the study identifies the fact that investors give a higher value to the shares of firms in which domestic public funds have investments, even without proof that such funds improve the profitability of companies. 2018 artículo científico 2531-0488 https://www.redalyc.org/articulo.oa?id=553856532006 https://www.redalyc.org/journal/5538/553856532006/ https://www.redalyc.org/journal/5538/553856532006/html/ https://www.redalyc.org/journal/5538/553856532006/553856532006.epub https://www.redalyc.org/journal/5538/553856532006/movil en http://www.redalyc.org/revista.oa?id=5538 RAUSP Management Journal application/pdf Universidade de São Paulo RAUSP Management Journal (Brasil) Num.2 Vol.53 |
| format | Artículo científico |
| id | redalyc_553856532006 |
| institution | Redalyc |
| language | en |
| publishDate | 2018 |
| publisher | Universidade de São Paulo |
| spellingShingle | Are pension funds good monitors? Igor Bernardi Sonza Administración y Contabilidad Performance Pension funds Control structure Are pension funds good monitors? Igor Bernardi Sonza Alberto Granzotto Administración y Contabilidad Performance Pension funds Control structure Pension funds, when they acquire common shares of companies in the capital markets, start to participate more actively in the decision-making of boards of directors and, through their representatives, in the monitoring of managers. The aim of this study is to determine whether pension funds are good monitors. This is done by identifying the influence of the control structure of pension funds over the financial performance and the market value of Brazilian public companies. Using dynamical models of linear and non-linear regressions estimated by GMM-Sys in an unbalanced panel from 1995 to 2015, it is shown that pension funds do not play a good monitoring role, as the control structure of these funds is negatively related to the financial performance of a company or, in other words, the higher the stake, the worse the performance of the company. A possible reason for this is that pension funds invest in the capital markets for portfolio diversification, are not concerned with specific decision-making in companies and have few monitoring skills, thus generating conflicts that go against the objective of maximizing the value of the company. Also, the study identifies the fact that investors give a higher value to the shares of firms in which domestic public funds have investments, even without proof that such funds improve the profitability of companies. 2018 artículo científico 2531-0488 https://www.redalyc.org/articulo.oa?id=553856532006 https://www.redalyc.org/journal/5538/553856532006/ https://www.redalyc.org/journal/5538/553856532006/html/ https://www.redalyc.org/journal/5538/553856532006/553856532006.epub https://www.redalyc.org/journal/5538/553856532006/movil en http://www.redalyc.org/revista.oa?id=5538 RAUSP Management Journal application/pdf Universidade de São Paulo RAUSP Management Journal (Brasil) Num.2 Vol.53 |
| title | Are pension funds good monitors? |
| topic | Administración y Contabilidad Performance Pension funds Control structure |
| url | https://www.redalyc.org/articulo.oa?id=553856532006 https://www.redalyc.org/journal/5538/553856532006/ https://www.redalyc.org/journal/5538/553856532006/html/ https://www.redalyc.org/journal/5538/553856532006/553856532006.epub https://www.redalyc.org/journal/5538/553856532006/movil |