Abstract: This paper analyzes micro-level dynamics of changes in ownership structures. It investigates changes in ownership patterns currently taking place in Brazil. It contributes to the corporate governance literature, building on this empirical evidence to further advance theoretical understanding on how and why concentrated ownership structures can change towards dispersed ownership. The paper provides the first evidence on the decline of ownership concentration in the structure of Brazilian corporations. There is, however, an important caveat: ownership has become more “dispersed” in Novo Mercado, the listing segment that requires firms to comply with the one-share-one-vote rule. This paper, then, investigates firms’ migration patterns. It analyzes what companies have listed in Novo Mercado, Level 2 and Level 1. I find that 85% of Novo Mercado’s are “new entrants” firms. Traditional firms have mostly migrated to Level 1, the least stringent segment regarding corporate governance practices. This suggests that we can identify two very different corporate worlds in Brazilian capital markets: the new fashion corporations who adopt better corporate governance patterns, and the old fashion corporations, who still have not changed their main patterns of corporate governance or corporate ownership. The analysis enables us to advance our knowledge of corporate structures in other emerging countries.

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