PATTERNS OF EFFICIENCY IN DISPERSED, DOMINANT AND CONCENTRATED OWNERSHIP STRUCTURES IN BRAZIL

SONZA1, IGOR BERNARDI

doi:10.1590/1678-69712017/administracao.v18n3p232-259.

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Strategic Finances • RAM, Rev. Adm. Mackenzie 18 (03) • May-Jun 2017 • https://doi.org/10.1590/1678-69712017/administracao.v18n3p232-259. copy

PATTERNS OF EFFICIENCY IN DISPERSED, DOMINANT AND CONCENTRATED OWNERSHIP STRUCTURES IN BRAZIL

PADRÕES DE EFICIÊNCIA EM ESTRUTURAS DE PROPRIEDADE DISPERSAS, DOMINANTES E CONCENTRADAS NO BRASIL

PATRONES DE EFICIENCIA EN LAS ESTRUCTURAS DE PROPIEDAD DISPERSAS, DOMINANTES Y CONCENTRADAS EN BRASIL

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Purpose:

The article aims to trace the behaviour of dispersed, dominant and concentrated ownership structures in Brazil and verify which of these structures is more efficient operationally and if there is a pattern to be followed.

Originality/gap/relevance/implications:

Static optimisation techniques are used by data envelopment analysis (DEA) to calculate the variable ‘efficiency', a differential in relation to previous studies that consider only outcome variables as a performance indicator. The article is one of the first in the area that traces the pattern of efficiency of ownership structures in Brazil.

Key methodological aspects:

The sample consists of 8,298 company years in the period between 1995 to 2012. To calculate the efficiency (dependent variable), static optimisation techniques were used by data envelopment analysis (DEA). After, the unbalanced panel data by GMM-Sys (system generalised method of moments) is applied to identify the influence of dispersed, dominant and concentrated ownership structures on efficiency.

Summary of key results:

The results showed that, although all the variables are positively related to efficiency, the graphic presented an inverted "U" format, i.e. dispersed and concentrated structures, mostly, are less efficient than dominant.

Key considerations/conclusions:

The study identifies that both agency problems and the expropriation of minority shareholders by the majority, stemming from weak legal protection in the country, significantly affect the efficiency of Brazilian companies, thus making dominant structures the most appropriated form of ownership structure in Brazil.

KEYWORDS:
Governance; Efficiency; Ownership Structure; Pattern; Optimisation

Formulas for variables related to data envelopment analysis
Input variables – Capital (K)
GCv - Investment: Capital expenditure on sales	$GCv \frac{CAPEX}{Sales}$
GCa - Investment: Capital expenditure on total assets	$GCa = \frac{CAPEX}{Total assets}$
CG - Investment: Operational working capital	CG = log (receivables + inventories – payables)
TA - Capital Stock: Tangible assets	$TA = \frac{Fixed assests}{Total assets}$
Input Variables – Labour (L)
NT – Number of employees	NT = log (number of employees)
Output Variables – Profitability (R)
ROA – Return on assets	$ROA = \frac{Net profit}{Total assets}$
ROE – Return on equity	$ROE = \frac{Net profit}{Equity}$
ROS – Return on sales	$ROS = \frac{Net profit}{Sales}$
Formulas for variables related to general analysis
BCC – Variable returns of scale	Index obtained by the DEA calculation using the variables described above, the maximum value of which is 1. Consider only variable returns of scale.
GRS - Total efficiency	It is the junction of the two models (CCR and BCC).
MCV - Ownership of the major shareholder	Percentage number of common shares owned by the company's main shareholder.
TCV – Ownership of 3 Major Shareholders	Sum of the percentage of common shares of the company's first three shareholders.
CCV – Ownership of 5 Major Shareholders	Sum of the percentage of common shares of the company's first five shareholders.
Formulas for variables related to general analysis
AA – Shareholders agreement	Dummy where 1 indicates that there is a shareholders' agreement in the company, and 0 otherwise.
Dissipated	Dummy where 1 indicates if the shareholders own less than 20% of the ownership, and 0 otherwise, multiplied by the ownership structure.
Dom. – Dominant	Dummy where 1 indicates if the shareholders own between 20% and 50% of the ownership, and 0 otherwise, multiplied by ownership structure.
Concent. – Concentrated	Dummy where 1 indicates if the shareholders own more than 50% of the ownership, and 0 otherwise, multiplied by the ownership structure.
Control variables
REC – Size: EBITDA	Logarithm of EBITDA
AT – Size: Total assets	Logarithm of total assets (descriptive statistics only)
Q – Tobin's Q	Ratio of the market value to the total assets (descriptive statistics only)
AL – Leverage	$AL = \frac{Total liabilities}{Equity}$
EFind – Industrial fixed effects	Dummies where 1 indicates that the company belongs to the industrial branch, and 0 otherwise (in some analyses these dummies were not considered).
EFtemp – Time fixed effects	Dummies where 1 indicates the year in which the data is generated, and 0 otherwise (in some analyses these dummies were not considered).
Regression tests
Chi2	Chi-square test
Hansen	Hansen test
Ar1 and Ar2	Arelano and Bond test for serial correlation with order 1 e 2

Est.	BCC	GRS	MCV	TCV	CCV	AL	Q	REC	AT
Mean	56.25	38.48	58.74	80.41	84.37	2.85	1.51	11.93	12.72
Median	58.77	19.63	58.40	87.30	90.00	1.45	1.02	12.22	12.88
p10	0.60	0.27	19.00	51.00	57.20	0.35	0.27	9.34	9.88
p25	8.99	2.37	35.00	68.50	76.00	0.73	0.52	10.77	11.32
p75	100.00	100.00	86.20	97.30	97.90	3.18	1.99	13.41	14.12
p90	100.00	100.00	98.70	100.00	100.00	8.37	3.56	14.47	15.36
Var.	19.1x10²	16.6x10²	8.4x10²	3.9x10²	3x10²	12.13	1.97	4.51	3.75
Min	0.18	0.09	0.00	0.00	0.00	0.00	0.01	1.50	9.06
Max	100.00	100.00	100.00	100.00	100.00	13.17	5.48	15.05	16.08

Variables	MCV			TCV			CCV
Variables	1	2	3	1	2	3	1	2	3
BCC(-1)	0.10^* ***** - Sig. 1%;	0.03	0.02	-0.02	-0.15^* ***** - Sig. 1%;	*0.11^ * - Sig. 10%.**	0.04	0.01	0.02
Z	(2.59)	(0.66)	(0.49)	(-0.26)	(-2.72)	(1.68)	(0.93)	(0.35)	(0.51)
Disper.	0.43	0.20	0.46	1.70	*1.79^ * - Sig. 10%.**	*1.66^ * - Sig. 10%.**	3.14^* ***** - Sig. 1%;	2.90^* ***** - Sig. 1%;	*2.11^ * - Sig. 10%.**
Z	(1.11)	(0.59)	(1.14)	(1.37)	(1.72)	(1.73)	(2.79)	(2.85)	(1.66)
Dom.	*0.49^ * - Sig. 10%.**	0.37	*0.52^ * - Sig. 10%.**	1.71^ - Sig. 5%;	*1.45^ * - Sig. 10%.**	*1.16^ * - Sig. 10%.**	2.15^* ***** - Sig. 1%;	1.92^* ***** - Sig. 1%;	*1.45^ * - Sig. 10%.**
Z	(1.77)	(1.47)	(1.75)	(1.93)	(1.83)	(1.62)	(3.24)	(2.74)	(1.65)
Concent.	*0.39^ * - Sig. 10%.**	*0.34^ * - Sig. 10%.**	*0.42^ * - Sig. 10%.**	*1.28^ * - Sig. 10%.**	*1.26^ * - Sig. 10%.**	0.74	1.64^* ***** - Sig. 1%;	1.45^* ***** - Sig. 1%;	1.09
Z	(1.74)	(1.73)	(1.73)	(1.79)	(1.79)	(1.37)	(2.89)	(2.58)	(1.48)
Size		0.02	-0.02		0.14	0.08		0.04	0.02
Z		(0.39)	(-0.29)		(0.93)	(1.24)		(0.85)	(0.36)
AL		-0.71^* ***** - Sig. 1%;	-0.72^* ***** - Sig. 1%;		-1.04^* ***** - Sig. 1%;	-0.45^* ***** - Sig. 1%;		-0.72^* ***** - Sig. 1%;	-0.77^* ***** - Sig. 1%;
Z		(-6.39)	(-6.06)		(-6.33)	(-3.12)		(-5.41)	(-5.25)
AA			0.39			0.26			0.13
Z			(1.29)			(0.75)			(0.32)
Constant	2.11	*1.92^ * - Sig. 10%.**	3.19	-3.23	4.88	-1.23	-5.30^ - Sig. 5%;	-3.44	-1.64
Z	(1.16)	(1.91)	(1.51)	(-0.94)	(0.64)	(-0.47)	(-2.01)	(-1.32)	(-0.48)
EF Ind.	Yes	No	Yes	Yes	No	No	Yes	No	No
EF temp.	Yes	No	Yes	Yes	No	No	Yes	No	No
chi2	98.79	56.88	439.87	53.45	55.96	35.53	77.49	49.59	44.34
chi2p	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Hansen	371.68	401.38	380.86	287.14	400.56	261.50	442.84	392.48	317.53
Hansenp	1.00	1.00	1.00	0.60	1.00	1.00	1.00	1.00	1.00
ar1	-7.59	-7.08	-7.03	-5.40	-7.14	-5.21	-7.92	-6.89	-6.16
ar1p	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
ar2	0.75	0.25	0.04	-0.04	0.06	0.12	0.65	-0.06	-0.10
ar2p	0.46	0.80	0.97	0.97	0.95	0.90	0.52	0.95	0.92

Variables	MCV			TCV			CCV
Variables	1	2	3	1	2	3	1	2	3
GRS(-1)	0.19^* ***** - Sig. 1%;	0.08^ - Sig. 5%;	0.06	-0.07	-0.06	-0.02	*0.08^ * - Sig. 10%.**	-0.06	0.04
Z	(4.56)	(2.12)	(1.35)	(-1.23)	(-1.08)	(-0.40)	(1.65)	(-1.06)	(0.73)
Disper.	0.76^ - Sig. 5%;	0.74^ - Sig. 5%;	0.93	1.53	*1.91^ * - Sig. 10%.**	0.74	1.24	2.04	0.75
Z	(2.36)	(2.31)	(1.52)	(1.30)	(1.76)	(0.40)	(1.06)	(1.37)	(0.38)
Dom.	0.63^* ***** - Sig. 1%;	0.74^* ***** - Sig. 1%;	0.85^ - Sig. 5%;	1.64^ - Sig. 5%;	1.94^* ***** - Sig. 1%;	0.84	*1.43^ * - Sig. 10%.**	2.07^ - Sig. 5%;	0.89
Z	(2.89)	(3.11)	(1.90)	(1.95)	(2.49)	(0.60)	(1.75)	(2.14)	(0.63)
Concent.	0.52^* ***** - Sig. 1%;	0.64^* ***** - Sig. 1%;	0.75^ - Sig. 5%;	*1.15^ * - Sig. 10%.**	1.53^ - Sig. 5%;	0.70	0.94	1.63^ - Sig. 5%;	0.83
Z	(3.00)	(3.49)	(2.03)	(1.70)	(2.39)	(0.60)	(1.34)	(1.99)	(0.70)
Size		0.15^* ***** - Sig. 1%;	*0.10^ * - Sig. 10%.**		0.24	0.10		*0.25^ * - Sig. 10%.**	0.18
Z		(3.07)	(1.75)		(1.62)	(0.50)		(1.63)	(1.22)
AL		-0.83^* ***** - Sig. 1%;	-0.96^* ***** - Sig. 1%;			1.00			0.66
Z		(-6.43)	(-6.41)			(1.40)			(1.21)
AA			*0.63^ * - Sig. 10%.**			-1.03^* ***** - Sig. 1%;			-0.96^* ***** - Sig. 1%;
Z			(1.69)			(-4.17)			(-4.24)
Constant	-0.16	*-1.64^ * - Sig. 10%.**	-1.55	-3.26	-5.00	-0.39	-2.13	-4.89	-0.15
Z	(-0.20)	(-1.66)	(-0.90)	(-1.00)	(-0.93)	(-0.04)	(-0.65)	(-0.81)	(-0.05)
EF Ind.	No	No	No	Yes	Yes	Yes	Yes	Yes	Yes
EF Temp.	No	No	No	Yes	Yes	Yes	Yes	Yes	Yes
chi2	29.73	79.51	73.30	48.28	53.03	104.79	103.53	55.73	105.48
chi2p	0.00	0.00	0.00	0.01	0.00	0.00	0.00	0.00	0.00
Hansen	462.84	398.36	316.08	318.19	306.98	221.27	432.22	307.35	253.35
Hansenp	1.00	1.00	1.00	0.32	0.46	0.48	1.00	0.45	0.99
ar1	-9.18	-8.35	-7.00	-5.35	-5.34	-5.36	-7.80	-5.45	-5.67
ar1p	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
ar2	-0.01	-2.25	-1.90	-1.25	-2.26	-2.45	-0.61	-2.21	-2.19
ar2p	1.00	0.02	0.06	0.21	0.02	0.01	0.54	0.03	0.03

Editora Mackenzie; Universidade Presbiteriana Mackenzie Rua da Consolação, 896, Edifício Rev. Modesto Carvalhosa, Térreo - Coordenação da RAM, Consolação - São Paulo - SP - Brasil - cep 01302-907 - São Paulo - SP - Brazil
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