ADDING VALUE TO INITIAL PUBLIC OFFERINGS (IPOS) IN BRAZIL, CONSIDERING ESG SOCIO-ENVIRONMENTAL FACTORS
DOI:
https://doi.org/10.56238/levv16n54-069Keywords:
Initial Public Offering (IPO), Value Creation, ESG (Environmental, Social and Governance)Abstract
The objective of this study was to verify, from an economic-financial perspective, whether the use of ESG practices contributes to a company adding value after an IPO. The theoretical framework highlights Initial Public Offering (IPO), Economic Value Added (EVA), Social Responsibility, and ESG (Environmental, Social, and Governance) factors. The methodology used linear regression to verify how the implementation of socially responsible actions by companies undergoing IPOs affects their associated economic value added. The sample considered companies that went public in Brazil between 2011 and 2019. Data were extracted from B3, Economática®, CVM, and the Eikon® database. Regarding the results and discussion, a statistically significant negative relationship was found between EVA and ESG. An increase in ESG is associated with a decrease in EVA. This finding revises the assumptions and expectations about the impact of ESG performance on value creation. The research indicated that the practice of socially responsible actions did not influence the economic value added of the companies in the sample. The findings are aligned with agency theory. The implications of this research can be applied to or influence practices in the field of corporate finance. These implications encompass investors or companies interested in the socio-environmental impacts on value creation. The relevance and value of this research are evidenced by providing subsidies to help in the decision-making of those who wish to understand the ESG impacts on the value creation of companies.
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