1 INTRODUCTION

In recent years, Brazil’s economy has been marked by corruption scandals involving public and private power. To mitigate acts of corruption by companies against public authorities, the Brazilian government instituted Law 12.846/2013, also known as the Anti-Corruption Law, representing a major step, as it deals directly with the conduct of corrupt companies. According to the Corruption Perception Index (CPI), Brazil’s position in 2016 was 79th. In 2017, it ranked 96th, and, in 2018, it ranked 105th. The decrease in this index was parallel to all the corruption events that broke out in the country.

In emerging countries (including Brazil), corruption is much more worrying where the levels of development of governance mechanisms may not be sufficiently adequate to deal with the impacts that corruption can cause (Lourenço et al., 2018). One of the impacts for companies based in countries with high levels of corruption is the devaluation of their brands in relation to companies located in countries with lower levels of corruption (Lin & Chuang, 2016), causing a negative impact on the company’s value (Thakur et al., 2019). In the late 1990s, the need for regulations to punish corrupt acts in the corporate environment became evident. The Inter-American Convention on Corruption sought to develop actions that would minimize organizational corruption from the perspective of restrictive and punitive measures. Also, in 2003, the United Nations Convention against Corruption highlighted the importance of international cooperation in combating corruption, preventing, criminalizing corruption, and recovering assets (Gin, 2016). Thus, countries participating in the convention, such as Brazil, the USA, and the United Kingdom, sought to incorporate legislation to combat corruption, each in its form and essence, expressing strong measures.

In this context, corruption becomes negative in all areas, causing serious economic problems through the retraction of investments (Shleifer & Vishny, 1993; Murphy et al., 1991; Murphy et al.,1993). Evidence of corruption increases the risk of investments, negatively affects the financial market, and, consequently, the company’s valuation before investors (Huang et al., 2015; Liu et al., 2017).

The adoption of anti-corruption practices is understood as an inherent aspect of Corporate Social Responsibility (CSR), by which companies aim to achieve their legitimacy since, by adopting these practices, they are concerned with the company’s ethics and morals (Joseph et al., 2016; Rodriguez et al., 2006).

Accordingly Nascimento et al., (2018), it was noted that political and economic instabilities influenced Brazilian companies’ financial performance and market value listed on the BM&FBovespa from 2013 to 2015. Araújo et al. (2018) identified that Lava Jato reduced the market value of companies directly involved in corruption scandals. However, these studies did not observe the levels of adoption of anti-corruption practices and the effect that the adoption of these measures had on companies’ market value. Therefore, this study has the guiding question: “What is the influence of the adoption of anti-corruption practices on the market value of Brazilian companies listed in [B]³?”. Therefore, the study’s objective is to verify whether the adoption of anti-corruption practices influences the market value of Brazilian companies listed in [B]³.

Conducting this investigation is justified because it contributes to a more comprehensive understanding of the relationship between anti-corruption practices, corporate social responsibility, and market value. This research’s relevance is that several international initiatives are being adopted, aiming to fight corruption worldwide. It is understood that the disclosure of anti-corruption practices affects the share price, as well as when punishments and involvement with corruption are disclosed, the market value of the shares may vary negatively.

One can cite initiatives taken by other countries to prevent corrupt acts. For example, the USA, for example, which in 1977 established the Foreign Corrupt Practices Act, a law seen as a precursor, and which established sanctions for infractions of corrupt acts among private entities and public bodies. Years later, as a result of corporate fraud events, the United States also implemented the Sarbanes Oxley Act in 2002, in response to the various corporate scandals that occurred in the late 1990s and early 2000s, which culminated in the bankruptcy of companies that were among the largest in the North American stock market. Commonly called SOX, this law provides for greater credibility in disclosing information provided to the corporate environment and protecting investors (Borgeth, 2007). SOX’s scope of action goes beyond disclosing information, incorporating ethical and transparent practices for executives, stockbrokers, administrators, consultants, auditors, and other members who work directly with the Security Exchange Commission (SEC), the entity responsible for regulating the stock market in the USA. Additionally, the law implements punitive sanctions for those who fail to comply with their legal provisions (Belli et al., 2016). Other initiatives can also be cited, such as in the United Kingdom where there is the United Kingdom Bribery Act (UKBA), the anti-corruption campaign in China (Brown et al., 2019; Xu, 2018; Ying & Liu, 2018)

This study aims to contribute to the academic environment, as well as to managers and those responsible for corporate governance, bringing to regulatory bodies, shareholders, related parties, and public bodies how anti-corruption actions affect the market value of companies listed in [B]³, also seeking to collaborate with society, adding content to research on corruption and market value in Brazil.

Other authors can use this study’s results, which sought to verify whether the market value is affected by anti-corruption practices. For the researched sample, it was found, through the estimates made, that the level of adherence to anti-corruption practices has a positive relationship with the market value, and if the variables are assessed individually through Panel Data Regression, it is also verified that such data are statistically significant, that is; the index of anti-corruption practices significantly influences the market value.

This article is structured in five sections. In the first, introductory aspects are presented. The theoretical review is presented in the second, covering the research theme, followed by the study methodology and design. The fourth section consists of data analysis, and finally, we present the final considerations.

2 THEORETICAL FRAMEWORK

2.1 Anticorruption Practices and Market Value

Corruption permeates several countries, not separating those developed from those in development, causing fraud and damage to the image and conduct of organizations and nations. In this context, events of corruption figure in global history long before the current laws were implemented in each country. In the United States, for example, in the 1970s, the Watergate case became known for involving 400 American companies in a bribery scheme that involved public officials in the collusion (Campos, 2015). In that same decade, the International Chamber of Commerce (ICC) released a set of practices and guidelines for companies to adopt to fight corruption and the Organization for Economic Cooperation and Development (OECD) with its 30 members and more non-member countries. Among them, Brazil signed a convention that established corruption as a criminal practice. Years later, in 2003, the Global Pact to fight corruption was signed, mediated by the UN, and which became the first global instrument to fight corruption(Pavesi, 2016).

Due to acts of corruption in different economic environments, countries such as the United States and the United Kingdom have sanctioned normative bases to mitigate these events. The USA has the Foreign Corrupt Practices Act (FCPA), which provides for violations and corrupt acts by companies to the public administration, and the United Kingdom has the United Kingdom Bribery Act (UKBA), which is the British anti-corruption standard, which has applications in the criminal and administrative sphere. Even though Brazil was present at several anti-corruption events, such as, for example, the United Nations Convention on Corruption and the Inter-American Convention to Combat Corruption (OAS), specific anti-corruption legislation took time to be created. Following international initiatives, such as the USA and the United Kingdom, Brazil, on August 1, 2013, instituted Law 12,846, known as the Anti-Corruption Law (Campos, 2015). From this, it is possible to argue that the enactment of the anti-corruption law in Brazil was influenced by an international context of movements by international organizations and other countries fighting against corruption.

The Anticorruption Law punishes Brazilian companies, civilly and administratively, for any act harmful to the public administration, national or foreign. According to the provisions of the law mentioned above, companies’ liability is objective, not excluding the individual liability of any natural person, author, co-author, or who participates in the illegal act (Brasil, 2013a; Brasil 2013b).

Following the Law, Decree 8,420 was enacted in March 2015, which regulates the Anti-Corruption Law and determines the bases for creating integrity programs in companies. When implementing these programs, companies should have as main objective to establish mechanisms and procedures of integrity, in addition to codes of ethics and conduct, aiming at good compliance with the laws. They must also work to detect and remedy fraud and unlawful acts. This compliance program extends to all company members, regardless of position. Thus, the Integrity Program has become an element of defense in companies’ eventual administrative processes, helping to reduce fines and sign a leniency agreement.

According to the research by Castro, Amaral e Guerreiro (2018), the integrity program directly affected the internal control of companies, leading Brazilian companies to adhere to the parameters of the compliance program of the anti-corruption law through new internal controls, which are mostly related to financial statements, bids, infractions, and donations to public parties.

The disclosure of information regarding compliance programs and the adoption of anti-corruption practices is directly related to the economic, political, and regulatory environment of each country, as well as the level of corruption in each country, as disseminating scarce information is as a way of hiding corrupt practices (Agyei-Mensah, 2017). The adoption and disclosure of anti-corruption actions by organizations are directly related to Corporate Governance and Corporate Social Responsibility. Companies adopt more conservative measures and more complex compliance structures to prevent fraud and litigation (Cella et al., 2019).

Caixe and Krauter (2014) and Madorran and Garcia (2016) point out that the practices of corporate governance and corporate social responsibility result in higher market value for companies, as they denote the adequacy of these with higher standards of corporate responsibility, becoming an instrument that can promote changes and improve trust, support, and the legitimacy of consumers and lead to greater transparency in the disclosure of information. When corrupt behavior is recognized in companies, anti-corruption legislation positively impacts the quality of accounting information (Bunkanwanicha & Greusard, 2018).

With the adherence and disclosure of anti-corruption practices, organizations can bring public awareness about the business’s moral principles, serving as an accountability mechanism. Also, it allows its stakeholders to know the organizational position regarding the accountability of managers and employees who may become involved in cases of corruption, to recognize their responsibility and the implications for reputation, integrity, and organizational legitimacy (Joseph et al., 2016). In this way, it is possible to argue that the adoption of anti-corruption practices can help entities achieve internal and external organizational goals and get their stakeholders to recognize the institutional efforts for the development of value businesses.

Regarding the relationship between corruption and the market value internationally, Fu (2019) identified that Chinese companies linked to announcements of corruption investigations had a decline in the price of their shares. In the Indian stock market, corruption is an important determinant of corporate liquidity and value (Thakur et al., 2019). In Europe, corruption is at high levels and represents a significant risk to developing the financial market (Boadi & Amegbe, 2017).

Miari, Mesquita and Pardini (2015) state that the Brazilian stock market does not react efficiently when it comes to issues related to organizational corruption. In contrast, Malgwi (2016) research shows that not all corruption and bribery have the same degree of impact in all countries and economies. Companies with high market performance suffer less impact than companies with low performance in the presence of corruption (Rocha et al., 2019). Additionally, Rodrigues and Medeiros (2019) denote that corruption may be associated with regional features, influencing how public managers will interpret the phenomenon of corruption.

Baungarte et al. (2019) suggested that corruption encourages activities developed through entrepreneurship, demonstrating a positive effect of corruption on entrepreneurship in developing countries. The studies of Amaral e Santos (2017) analyzed the effect on the price of the shares of Brazilian companies that were subject to the Foreign Corrupt Practices Act (FCPA) resulting from the punishment imposed by the Securities and Exchange Commission (SEC) due to acts of corruption practiced with foreign government officials, concluding that the returns showed a negative reaction from the market participants towards the punishment, however, some market participants had access to the information of the punishment in advance. For Grossi et al. (2018), Brazilian companies with ADRs in the American market obtained lower abnormal returns when disclosing information involving them in corporate crimes or corruption scandals.

Corruption hinders Brazilian firms’ investment decision making. Thus, the company’s adoption of anti-corruption measures can increase the organization’s credibility. With the help of anti-corruption preventive mechanisms, investments in companies are boosted (Pellicani, 2017). Consequently, investors’ perception positively impacts companies, leading them to prefer to invest in companies with ethical conduct.

From a market perspective, companies that adopt compliance practice require that they also have and follow anti-corruption rules when negotiating with other organizations. When providing international business, foreign authorities opt for caution when negotiating with Brazilian companies portrayed in corruption scandals. For this reason, when implementing anti-corruption practices, companies aim to provide greater transparency and minimize information asymmetry among stakeholders. Anti-corruption compliance practices also contribute to improving communication with the external environment, given the achievement of a competitive differential in relation to the market, with the legitimacy created in the disclosure of this information.

Therefore, the compliance program is a way to attract investors, customers, and suppliers, improving the company’s competitiveness and transparency. Finally, it is observed that when implementing a compliance program that shows anti-corruption practices, the organization will demonstrate greater corporate responsibility to the market, denoting greater security, transparency, compliance with the laws (in the operationalization of its activities), which mitigate the probability of the company in engaging in acts of corruption, whether civil, labor, tax, environmental (Brandi, 2017). Given the spectrum presented, the study hypothesis is announced:

H1: The level of adoption of anti-corruption practices positively impacts the market value.

Given the study’s hypothesis, the following section presents the methodological path used to test it to verify the assumptions made in that study.

3 METHODOLOGY

Collis and Hussey (2005) indicate that studies in applied social sciences can be classified as objective procedures for obtaining data and addressing the problem. Considering the above, this study is classified as descriptive in relation to its objective, documentary with regard to the strategy adopted for data collection, and a quantitative approach to analyzing the problem.

The research population comprised all the companies listed in [B]³ (Brazilian Stock Exchange). The initial sample used in the study was made up of the 66 companies listed on the Ibovespa in August 2019. The Ibovespa index was used because it is the main performance indicator of the stocks traded on [B]³. Its composition is due to shares that have good liquidity and a high volume of trades. As such, it measures the mean performance of the most representative stock portfolios traded on the stock exchange.

For the analysis, financial institutions were excluded, as these entities have peculiar characteristics in relation to other companies. Companies that did not have all the variables available for the study were also eliminated. From this, the final sample was determined, which resulted in 50 companies listed in this index. Table 1 shows the distribution of companies by sectors defined by [B]³.

The number of companies/year varied according to the availability of documents necessary to capture the level of adherence to anti-corruption practices. In 2014, the final sample of analysis totaled 43 companies. In 2015, 44 companies reported. In 2016, 45 companies made the base documents available for analysis. In 2017, 47 companies and in 2018, 50 companies. The companies listed on the Ibovespa and which were not analyzed were due to not disclosing the necessary documents and/or not having the financial information for the periods analyzed. In the end, it totaled 229 observations.

3.1 Data Collection and Analysis Procedures

Data collection was started by consulting the companies and [B]³ email addresses, looking for financial statements, sustainability reports or equivalent, integrated reports, reference forms, code of ethics and conduct, and/or company policies, referring to the years 2014 to 2018, seeking to evidence whether these companies have adhered to anti-corruption rules over the analyzed period. The economic and financial data were extracted from Economática®.

To check the degree of companies’ adherence to anti-corruption practices, after collecting the documents, a checklist was used, consisting of 13 questions based on the 10th Principle of the UN Global Compact. The questions were adapted from the work of Pavesi (2016), who studied the level of anti-corruption disclosure of Brazilian companies listed in the new market segment in 2015. As reported by (Pavesi, 2016), the issues were based on the 10th UN Global Compact Principle, on Transparency International (TI) studies, on the Integrity program that is dealt with in the Anti-Corruption Law (BRASIL, 2013), and on the sustainability reports of the Global Reporting Initiative (GRI). Appendix A shows the checklist used and the assessment criteria used.

According to the checklist from the analyzed documents, the aspects verified through the checklist were evaluated with a score ranging between 0.00 points, 0.5 points, and 1.0 points, according to the fulfillment/disclosure of the criteria contained in the checklist. When meeting 13 points, the company would have 100% adherence to anti-corruption practices, and if it met 0 points, the company would not meet any anti-corruption practices, demonstrating the lack of concern with this issue. Thus, the anti-corruption practices index (IPAC) was measured based on the proportion of points obtained in the checklist by the total of 13 points. The procedures adopted are similar to those already carried out by Pavesi (2016) and Joseph et al. (2016). The variables used and their respective operations are shown in Table 2.

To test the established hypothesis, which predicts a positive effect of adopting anti-corruption practices on the analyzed companies’ market value, econometric models were employed, using the multiple linear regression technique with data organized in a cross-section poll with sector dummies and standard deviations clustered by company. The multiple linear regression technique allows verifying the relationship between one or more explanatory variables and a quantitative dependent variable. The implicit assumption that there may be causal relationships between them (Fávero & Belfiore, 2017; Gujarati & Porter, 2011). The choice of estimation based on this technique was because, in the sample, the data are unbalanced, and to verify the existence of a relationship between the market value, dependent variable, and the index of adoption of anti-corruption practices, an independent variable of the study and control variables. To test the effect of the anti-corruption law on companies’ market value, the model in equation 1 was proposed.

In the proposed model, the companies’ market value was used as the dependent variable in the respective years of observation and as explanatory variables, the index of anti-corruption practices and the other control variables, as shown in Table 2. The equation model was estimated in four moments, the first with only the explanatory variable, and later with the gradual inclusion of the variables of financial control, governance, and characteristics of the companies. We opted to perform this estimation process to capture the effect that control variables can have on the relationship between the index of adoption of anti-corruption practice and the market value of the companies in the sample. As a robustness test, the models were re-estimated with panel data regression with fixed effects to allow verification that the results found in the initial estimates remain, even when the timing of the data is controlled. According to Gujarati e Porter (2011), the estimation of econometric models with panel data offers informative data, with greater variability, less collinearity that allows examining the dynamics of change during the analysis period considered, and offers greater efficiency in estimating when evaluating the evolution of variables over time (Fávero, 2013). The Hausmann test was used to verify the adequacy of the use of fixed effects in the estimation instead of random effects.

The control variables that made up the proposed econometric model were established in view of previous studies that have already shown the effect of these on the market value, thereby mitigating possible biases. The size of the company is a factor that can affect the market value, it is expected that the larger the organization, the greater the control capacity of the entity in generating results that reverberate in return to shareholders, contributing to the appreciation of the organization by the market (Basu et al., 2016; Fosu et al., 2016; Moura et al., 2020). Leverage was included in the proposed model, as it can be considered as a disciplinary mechanism for management and the organization’s performance, leveraged companies present greater financial risk, which consequently can cause the market to apply a higher discount rate, which may consequently affect the market value (Araújo et al., 2018; Moura et al., 2020; Viana et al., 2019). The performance of an entity perceived by investors are also aspects that can affect performance and market value (Agyei-Mensah, 2017; Brown et al., 2019; Thakur et al., 2019), so to control the effect of these aspects, liquidity, ROA, and ROE were considered as proxies. Companies that have higher growth rates tend to be valued by the market, as they manage to indicate to investors potential for generating returns, and with this, impacting on the valuation of their shares (Fosu et al., 2016; Likitwongkajon & Vithessonthi, 2020; Varaiya et al., 1987). As a measure of business risk, the volatility of a company’s stock value can negatively affect the market value because of the greater the variability of stock returns, the greater the risk perceived by the investor, which can lead the market to react negatively (Nascimento et al., 2018; Rossi & Harjoto, 2019).

Corporate governance is also a factor that may have an effect on the market value (Caixe & Krauter, 2014; Li et al., 2015; Santos et al., 2019), so a dummy was used to capture the entities listed in the new market and a dummy for when the statements were audited by a Big Four audit company. There are theoretical aspects in the literature that indicate that the adoption of sustainable practices has an effect on the firm value, one that predicts that the market tends to recognize sustainable companies and consequently value them, and another that deals with the market that does not recognize since these expenses reflect only expenses to shareholders (Qureshi et al., 2020; Yu & Zhao, 2015), to capture this aspect, a dummy for companies listed on the ISE was included. Characteristics of organizations can also affect the market value of the entity, including the age of the organization, ownership control, and family business(Brown et al., 2019; Goes et al., 2017; Jara et al., 2019; Klein et al., 2005; Rossi & Harjoto, 2019) were the characteristics controlled in this study.

To reduce the impact of observations with outliers, the financial variables were submitted to the winsorize technique, where a lower limit (1%) and an upper limit (99%) were applied, which allowed to control the extreme effects for each variable used and thereby reducing the impact of outliers. The tests were performed using the Stata® software.

4 ANALYSIS AND DISCUSSION OF RESULTS

Regarding the characteristics of the companies that make up the sample, it was observed that only 3 were not listed in the Corporate Sustainability Index (ISE), which is the index that analyzes the sustainability performance of companies listed in [B]³. Regarding the control of these companies, it was found that 88.65% of them are privately owned companies, and 11.35% are state-owned.

If the number of companies that are part of the New Market is observed, the percentage reached 60.26%, that is, more than half of the companies that formed the sample are companies that voluntarily commit themselves to adopt corporate governance practices, in addition to those required by law. New Market includes companies with the highest levels of corporate governance in [B]³.

Only 37.99% of all companies are family-owned. It should be noted that entities that control the shareholding by members of the same family, whether directly or indirectly, were considered family companies. The percentage of companies audited by the four largest auditing and consulting companies in the world is 92.14%, demonstrating that the Big Four have audited companies in the vast majority of years. For Almeida and Almeida (2009), the hiring of audit companies considered Big Four indicates to the market greater reliability, due to the expertise of the auditors of these audit companies.

After collecting all the data, the consolidated IPAC result for the year was reached, as shown in Table 3.

It is observed that the lowest mean adherence to anti-corruption practices occurred in 2014, in the proportion of 60.85%. Over the period analyzed, this mean increased, reaching a mean of 89.62% in 2018. Therefore, it appears that companies have improved their adherence or the way they disclose anti-corruption practices over these years. It is suggested that one of the justifications for the increase in the adherence rate is the institution of the Anti-Corruption Law, which came into force in 2014. Decree 8,420, promulgated in March 2015 and, in parallel, there were several corruption scandals in the country, making the market, companies, and investors more demanding in relation to anti-corruption practices, making companies feel obliged to disclose such practices.

Also noteworthy are the following findings made during data analysis; in 2014, the lack of some documents made the analysis a little more restricted. However, the information disclosed about anti-corruption practices by companies was very scarce. In 2015, some companies started to highlight that they were implementing or implementing anti-corruption compliance programs. In 2016, in addition to the increase in data found on corruption, some companies were condemned by the Lava Jato operation, agreements with the FCPA, and investigations on irregular payments. In 2017 and 2018, the subject that predominated in the information disclosed on the subject was reviewing codes of ethics and the reformulation of company policies.

The gradual increase in the calculated index may be due to greater pressure from the market in terms of regulation, business, and mimicry that makes organizations increasingly concerned with showing their stakeholders their commitment to the morality with which business is managed. For Joseph et al. ( 2016), organizations are led to adopt anti-corruption practices due to several factors, among them there are coercive issues, which derive from the obligation resulting from regulation, as an isomorphic mimetic force, which is due to the adherence of anti-corruption practices to be adopted by competitors.

When segregating companies by sectors, analyzing the IPAC, it was found that, according to Table 4, the sector that in 2014 had the highest level of adherence to anti-corruption practices is that of Oil, gas, and biofuels. The higher level of adoption by this sector is justified because it is composed of state-owned companies. Therefore, it is believed that they have already released such information, as they are closer to the legislation.

The sector with the lowest adoption, in that same year, is Cyclic Consumption, according to Table 4. On the other hand, it can be seen that it is also the sector that most evolved and improved its IPAC, which in 2014 was, on average, 35.47% in adherence and in 2018 it rose to 85.31%, showing an evolution of 49.84% between its lowest and highest IPAC mean. Analyzing 2018, all sectors, except Cyclic Consumption and Basic Materials, adhered 90.00% or more to anti-corruption practices. Nonetheless, the fact that they did not reach such an average is justified by the number of companies in their composition. Therefore, these are the two sectors comprising the largest number of companies. The fact that some sectors have relatively low standard deviations reinforces the discussion about whether the adoption and disclosure of anti-corruption practices can be explained by the existence of mimicry among companies in the same sector (Joseph et al., 2016). Thus, the disclosure of anti-corruption practices can be perceived as a transparency mechanism, capable of providing competitiveness to entities, which is perceived by peers.

The results found in this study are superior to those found by Pavesi (2016), who found a mean adherence of 44% when analyzing companies listed in the new market segment. Divergent from the research findings, we find that the sector of industrial goods, oil, gas, and biofuels, and health are among the sectors with the highest level of disclosure of the adoption of anti-corruption practices. Considering that the author evaluated the 2015 period, it is possible to argue that organizations have increased efforts in the adoption and dissemination of anti-corruption practices in recent years.

To analyze the influence of IPAC on market value, variables related to market value were identified. Table 5 shows the descriptive statistics for the variables in the period evaluated.

It appears that the mean liquidity of the companies observed was 0.87. General Liquidity demonstrates the company’s financial health, as it considers the company’s short and long-term obligations. Out of the 229 observations, the mean growth was 10.65%, and the mean age of these companies was 28 years, and of the total sample, the youngest company is 4 years old and the oldest, 65.

Regarding the market value of these companies, the minimum value for the entire period was R$ 386,078.90. A maximum of R$ 334,313,502.88. The mean market value was R$ 28,816,032.70. If the IPAC variable is observed, a mean of 78.11% adherence to anti-corruption practices was obtained, demonstrating that most of the anti-corruption practices listed in the checklist are complied with and disclosed by companies, higher than that reported by Pavesi (2016).

The proposed equational model was estimated using multiple linear regression to test the research hypothesis, and the results are reported in Table 6.

From the results reported in Table 6, it is possible to point out that the adoption of anti-corruption practices had a positive effect on the companies’ market value, in all estimates. This result indicates that the adoption of anti-corruption practices causes an increase in the entities' market value. This result is consistent with what was found previously by Lin and Chuang (2016), Thakur et al. (2019), Brown et al. (2019), Boadi & Amegbe (2017) and Fu (2019), who identified that the regulation of anti-corruption practices positively affects the value of companies and diverges from the results reported in Zulvina and Adhariani (2020) and Miari et al. (2015).

Unlike the studies (Xu, 2018; Zeume, 2017; Zulvina & Adhariani, 2020) that found a negative effect of adopting anti-corruption regulations on firm value, the results found are consistent with the perspective that the adoption of anti-corruption practices are recognized by the market and investors, giving greater security to stakeholders and adding value to organizations and shareholders. From this, it is possible to point out that the Brazilian market reacts favorably to the adoption of anti-corruption practices by companies and diverging from the hypothesis of the economic literature that says that corruption is harmful to organizations and is capable of negatively affecting the performance and value of organizations (Shleifer & Vishny, 1993).

Contrary to expectations, the company’s participation in the ISE showed a negative effect on the market value of the companies analyzed, which is in line with what was reported by Andrade et al. (2013). When comparing the market value of companies listed in the ISE with those not listed, they identified that the unlisted companies had a higher market value. When analyzing the post-financial crisis period of 2008, the ISE had a negative effect on the companies' market value. This finding may lead to a signal that it is not yet evident that the Brazilian financial market recognizes institutional efforts to adopt sustainable practices and that there may be differences between business sectors (Cristófalo et al., 2016; Qureshi et al., 2020). Furthermore, this result corroborates the theoretical aspect that spending on sustainable aspects is an expense for shareholders and does not add value to organizations (Yu & Zhao, 2015).

The variables size, growth, ROA, and Big4 were also significant and positively affected market value, which shows that larger companies with higher returns lead to an increase in market value. This finding makes it possible to point out that investors value organizations with adequate management of their resources to generate profits. These findings corroborate previous studies (Thakur et al., 2019; Vafeas & Vlittis, 2019) that have also evaluated companies’ market value determinants.

Considering that the study has a time horizon of five periods, we re-estimated the proposed model using the regression technique with panel data to test the results' robustness. Estimations were performed with fixed and random effects, considering the Hausmann test (X2 = 25.94; p-value < 0.05), the estimation with fixed effects proved to be more appropriate for the proposed model. Given that the estimation by fixed effects proved to be more appropriate, the variables of the company's characteristics such as property, level of governance, and family business technically it was not possible to include in the estimates due to being invariant over time. The results are reported in Table 7.

The results obtained in the estimations with the regression with panel data with fixed effects confirm the initial estimates' results. In other words, it denotes that the adoption of anti-corruption practices has a positive effect on the market value of the analyzed entities.

Thus, based on the tests performed, it is possible to accept the study’s hypothesis, which predicted a positive relationship between the adoption rate of anti-corruption practices and the companies’ market value. These results show that organizations' efforts to demonstrate suitability in relation to government regulations demonstrate the market transparency of their corporate responsibility, legitimized by investors. Thus, generating value for the shareholders and stakeholders of the organizations.

Given the results obtained in this investigation, it is possible to show that it is convergent with the theoretical aspect that denotes the benefits of the legislators’ efforts regarding the regulation of the adoption of anti-corruption practices. Thus, the adoption of these practices can no longer be seen only as costs of controls, but also as a mechanism capable of reflecting on better results for organizations, through market recognition in the valuation of these entities.

Regarding the control variables in the estimation with fixed effects, the results are similar to those previously found. Adding that the leverage was shown to have a negative effect on the company’s value, that is, the increase in indebtedness decreases the companies’ market value, which differs from previous studies that show that leverage has a disciplinary effect on the performance and market value of companies (Araújo et al., 2018; Moura et al., 2020), and liquidity had a positive effect, which denotes that the solvency of the entities is capable of reflecting positively on the market value of the companies (Arrighetti et al., 2014; Moura et al., 2020).

5 CONCLUSIONS

The study aimed to verify the existence of a relationship between anti-corruption practices and the market value of publicly traded companies listed on Ibovespa. To this end, a descriptive, documentary, and quantitative research was carried out, aiming to measure the level of companies’ adherence to anti-corruption practices, through the examination of corporate documents, such as: reference forms, codes of ethics and conduct, company policies, sustainability reports, and other equivalent documents, and, after that, verify the relationship with the market value through the variables that have been defined.

The results showed that, statistically, there is a positive relationship between the adoption of anti-corruption practices and the market value of the companies included in the sample. Therefore, the study hypothesis was accepted. The results of this research bring data that can add knowledge and help investors, public agencies, and other related parties, as it shows that organizations have been increasing disclosure about the adoption of anti-corruption practices. As can be seen from the results, in 2018, the mean number of companies complying with the Anti-Corruption Law was 89.62%, while in 2014, the mean level was 60.85%. There is an increase of 28.77% in adhesion level, demonstrating that companies' concern in disclosing or adhering to such practices increased during the period analyzed. Also, of the 229 observations in the sample, only 3 were not listed in the ISE, and 11.35% of these companies are state-owned. Now, if the number of New Market members is verified, there are 138 companies, and 37.99% of the total are family businesses.

The results of this investigation contribute to the empirical and theoretical field by showing that the regulation of the adoption and disclosure of anti-corruption practices can influence companies' performance and add value to shareholders. At the end of this investigation, it is recalled that this study contributes to the academic environment by establishing a discussion about the effect of the regulation of the adoption of anti-corruption practices on the market value of companies in emerging markets. Empirically, the study is relevant for managers and those responsible for corporate governance, bringing to regulatory bodies, shareholders, related parties, and public bodies how anti-corruption actions affect the market value of companies listed in [B]³, also seeking to collaborate with society, adding content to research on corruption and market value in Brazil.

For future research, it is suggested the inclusion of financial institutions in the studied sample and also an analysis considering the factors: involvement in scandals or corruption investigations and how they can influence the market value and adherence to anti-corruption practices. It is also worth emphasizing the importance of analyzing and identifying other factors that may influence the market value, in addition to the variables used in this study.

As a limitation of the study, it is possible to point out that only a portion of the companies listed in [B]³, which is the Ibovespa, was analyzed, which may be a factor that limited the results obtained. Besides, as a checklist was used to measure the level of anti-corruption practices, interpretation bias should be considered.

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