The effect of voting rights on firm value

Scherrer, Cristina Mabel ORCID: 0000-0002-7935-5378 and Fernandes, Marcelo (2021) The effect of voting rights on firm value. International Review of Finance, 21 (3). 1106 - 1111. ISSN 1369-412X

Text (Int Rev Finance - 2020 - Scherrer - The effect of voting rights on firm value) - Published Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (752kB)

Abstract

We present a simple framework for dual-class stock shares in which common shareholders receive public and private cash flows (i.e., dividends and any private benefit of holding voting rights) and preferred shareholders only receive public cash flows. We isolate these two cash flows in order to identify the role of voting rights on equity-holders' wealth. In particular, using a structural cointegrated VAR model, we find a negative relationship between the value of the voting right and the preferred shareholders' wealth.

Item Type:	Article
Additional Information:	© 2020 The Authors
Divisions:	Finance
Subjects:	H Social Sciences > HG Finance H Social Sciences > HB Economic Theory
JEL classification:	G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation
Date Deposited:	08 Oct 2024 09:18
Last Modified:	01 Nov 2024 05:48
URI:	http://eprints.lse.ac.uk/id/eprint/125648

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