Contingency effect of the operation low meat on the value of the shares of the main players in the protein market in Brazil and Mexico

Abstract

The investigation of the consequences of corporate scandals involving corruption, supported by the theoretical framework of finance, has aroused the interest of researchers and administrators, as the existence of mismatch in the sharing of information in contractual relationships is recognized (MANSFIELD; YOHE, 2005) , such misalignment can lead to market failures resulting in ineffective or socially undesirable economic effects. In this sense, the objective of this research was to investigate whether, as a result of the Low Flesh Operation of the Federal Police, there is evidence of a contagion effect in value of the actions of the main players in the protein market of Brazil and Mexico. The survey sample is made up of 5 (five) Brazilian companies and 5 (five) Mexican companies. Data were collected from Bloomberg and analyzed based on an Event Study. The findings suggest consistent evidence of the presence of abnormal and significant abnormal returns for Brazilian companies and, on the other hand, abnormal and positive returns to Mexican companies, corroborating the hypothesis of the presence of a contagious effect as a result of Operation Carne Locha. In addition to the impacts on the Brazilian capital market, there are negative developments in contractual relations, especially among managers and investors, reinforcing evidence of behavior of the Brazilian capital market in the semi-strong form.