REGULATION AND ITS INFLUENCE ON STOCK PRICE: AN EMPIRICAL ANALYSIS IN CIVIL AVIATION SECTOR

Abstract

Studies show that regulation tends to affect factors related to businesses such as accounting procedures, structural reforms, funding policies, exposure to capital markets, among others. In this context, this study aims to determine whether the creation of the Agência Nacional de Aviação Civil - ANAC (National Civil Aviation Agency) has impacted on the companies’ stock price in the Brazilian air transport sector. To this end, we used intervention statistical analysis, looking to make the relationship between the average price per share and the ANAC emergence considering a dummy variable, after the stock quotes collection and Ibovespa Index on the site of Bolsa de Valores de São Paulo (Bovespa). We included in this study Tam, Gol, Varig, and S.A Viação Rio-grandense airlines companies that had publicly traded in the Bovespa, from 2003 to 2007. It was found that the regulation affects the stock price when the Ibovespa index is not considered and that the securities' price of Tam and S.A Viação Rio-grandense companies were affected by regulation. By inserting the Ibovespa index in the regression, in order to eliminate the market valuation effect in the stock price, the results were similar, being Tam and S.A. Viação Rio-grandense companies the only ones with angular coefficients statistically significant. For Gol and Varig airlines, we can not say that the stock price had some influence by regulation.