Equity Purchases (Lazzarini & Musacchio)

Leviathan as a minority shareholder: a study of equity purchases by the Brazilian National Development Bank (BNDES), 1995-2003, by Sergio G. Lazzarini and Aldo Musacchio, recommended by Pedro Saffi. The autors find that the positive effect of BNDES’ equity purchases is reduced when the target firms belong to state-owned and privade pyramidal groups. “Therefore, our argue that having development banks owning minority stakes can have a positive effect on performance as long as they promote long-term investments and are shielded from government interference and potential minority shareholder expropriation”. spoke the autors.