The market value of cash and the creation of high‐governance listings of voluntary adoption: Evidence from the Brazilian stock exchange
研究巴西证券交易所设立的自愿采用高治理标准上市板块能否减少管理者侵占现金，发现投资者对这些板块公司的现金估值更高，最高标准板块（一股一票）的现金价值达0.687美元，而传统板块仅0.239美元。
Abstract Research Question/Issues In this article, we analyze whether the initiative of a domestic stock exchange that designed three high‐governance listings of voluntary adoption, in addition to maintaining its traditional listing, can mitigate managers' ability to expropriate cash. As a result of the reduction in improper cash diversion in firms with higher disclosure and corporate governance standards, we hypothesize that investors place a higher value on cash in the firms that voluntarily migrate to the premium listing. Research Findings/Insights After a series of robustness checks, we document that investors place a higher value on the cash of firms from the non‐mandatory premium listing ($0.589) in relation to the cash of the companies from the regular traditional listing ($0.239). Our findings also reveal that the market value of cash is higher in firms from the segment with the highest standards ($0.687), where companies follow the “one share, one vote” principle. Theoretical/Academic Implications The empirical results suggest that shareholders associate the premium listings segments as a commitment that reduces the risk that cash holdings will be converted into private benefits, and consequently, they place a premium on the cash of companies that subject themselves to these levels. Hence, by lessening shareholders' markdown of cash holdings, the premium listing segments mitigate part of the value loss associated with weak governance in Brazil. Practitioner/Policy Implications Our results provide important policy implications by demonstrating that a domestic stock exchange, by creating a premium listing of voluntary adoption, can provide mechanisms for firms to self‐select into segments with greater transparency and stricter corporate governance that, in turn, send a positive signal about the underlying risk that firms may expropriate cash. Hence, emerging countries where reforms of corporate law are designed to protect investors from facing serious political opposition may also consider creating special listings such as in Brazil, as a private contractual arrangement, to increase the protection of shareholders.