ANALYSIS OF THE EFFECTS OF IMPLEMENT INVESTMENT’S DECISIONS ON OPERATIONAL PERFORMANCE, PROFITABILITY AND VALUE CREATION OF BRAZILIAN COMPANIES

Abstract

This paper aims to identify if theimplementation of investment decisions in Brazilian companies traded on theBM&FBovespa, occurred between Jan/1995 and Jun/2010 improved their operationalperformance, profitability of the invested capital and result in shareholder value creation.  Based on the proxies of investmentdecision: Variation in Assets, Variation in Fixed Assets and Variation inSubgroup Investments, three samples were analyzed separately, by the way ofmetrics: variation of EBIT, Gross Margin, Net Margin; Return on Assets, Returnon Investment, Return on Equity; Abnormal Return, Book-to-Market ratio andTobin´s Q.  We used the Wilcoxon Signed Rank Test to comparedthe aggregate means (all firms for sample) of the eight previous quarters witheight post-implementation.  We found a reduction in profitability,improve economic performance, beyond of the shareholder value creation, that can have been influenced by the growthof the Brazilian economy.