Public debt issuance and corporate governance in the United States and Brazil

Abstract

Debentures are important financing resources for U.S. and Brazilian companies. The manner of securing a debenture can improve a company’s capital structure and maintain its ownership structure while diversify risk. Most credible companies have better opportunities because they implement good corporate governance practices that tend to provide instruments to ensure greater protection for their creditors. Motivated by this, our research makes a multi-case analysis of Brazilian and American companies with respect to the characteristics of their corporate governance mechanisms during security emission processes. The methodology is based on the Economic Commission for Latin America and the Caribbean index, a quantitative tool that was developed to measure governance and the internal control of risk levels. The results show differences in governance between these countries. Two possible causes of this difference are the market’s most selective characteristics and internationalization, which require Brazilian companies to adapt to global rules