| This article investigates the hypothesis that property structure of organizations is important for the products and services they supply. The analysis is accomplished through the study of the Brazilian Stock Exchange (Bovespa), which modified its property structure with demutualization and capital opening at the end of 2007. The New Institutional Economics (NIE) is the framework employed to understand the change since the neoclassic Industrial Organization fails to explain the process when emphasizes monopoly goal for contractual alterations and reformulations. By the NIE the property structure modification could result in deterioration of quality, due the necessity of for-profit firms to raise profits and cut costs, or improvement in quality, due to efficiency increase. This empirical question is evaluated through Lumsdaine and Papell’s (1997) endogenous two structural break test, measuring the average bid-ask spread of all stocks negotiated at Bovespa. The result indicates there is a significant break in the series trend at the same period of the demutualization process, suggesting there was an improvement in the information quality with demutualization. |
