Experiments in Financial Democracy: Corporate Governance and Financial Development in Brazil, 1882-1950

ISBN-13: 9780521518895 / Angielski / Twarda / 2009 / 326 str.

Aldo Musacchio

Opis

This book is a detailed historical description of the evolution of corporate governance and stock markets in Brazil in the late nineteenth and twentieth centuries. The analysis details the practices of corporate governance, in particular the rights that shareholders have to restrict the actions of managers, and how that shaped different approaches to corporate finance over time. The book argues that companies are not necessarily constrained by the institutional framework in which they operate. In the case of Brazil, even if the protections for investors included in national laws were relatively weak before 1940, corporate charters contained a series of provisions that protected minority shareholders against the abuses of large shareholders, managers, or other corporate insiders. These provisions ranged from limits on the number of votes a single shareholder could have to restrictions on the number of family members who could act as directors simultaneously. The investigation uses the Brazilian case to challenge some of the key findings of a recent literature that argues that legal systems (e.g., common vs. civil law) shape the extent of development of stock and bond markets in different nations. The book argues that legal systems alone cannot determine the course of stock and bond markets over time, because corporate governance practices and the size of these markets vary significantly over time, while the basic principles of legal systems are stable.

Recenzje

'If you thought that the dismal state of corporate governance in Latin America is a direct product of its colonial or civil law heritage, Experiments in Financial Democracy will make you think again. Based on painstaking archival work, Aldo Musacchio demonstrates that in the late nineteenth century, investors in Brazilian corporations were better protected than they were in the late twentieth century. The law secured the claims of bondholders while many firms protected minority shareholders in their corporate charters. The work convincingly demonstrates that even poor countries can create and implement institutions favorable to capital markets. This optimistic historical finding is fully relevant to our troubled financial times.' Jean-Laurent Rosenthal, California Institute of Technology

Spis treści

1. Introduction; 2. Financial development in Brazil in the nineteenth century; 3. The stock exchange and the early industrialization of Brazil, 1882–1930; 4. The foundations of financial democracy: disclosure laws and shareholder protections in corporate bylaws; 5. Voting rights, government guarantees, and ownership concentration, 1890–1950; 6. Directors, corporate governance, and executive compensation in Brazil, c.1909; 7. Bond markets and creditor rights in Brazil, 1850–1945; 8. Were bankers acting as market makers?; 9. What went wrong after World War I?; 10. The rise of concentrated ownership in the twentieth century; 11. Conclusion.