One Share–One Vote: Evidence from Europe

Johan Erik Eklund, Thomas Poulsen

    Publikation: Bidrag til tidsskriftTidsskriftartikel

    Abstrakt

    Many European companies use some type of control-enhancing mechanism, such as dual class shares or a pyramid ownership structure. Such mechanisms cause deviations from the one share–one vote principle, allocating more voting rights than cash flow rights to some shares and, in turn, providing the owners of such shares with more influence than what would be warranted by their investment. However, disproportionate influence may also arise in firms without such mechanisms. In this article, we present a method for disentangling disproportionality, which allows us to more precisely test the effects of deviations from the one share–one vote principle. We argue that previous studies suffer from a measurement problem caused by the use of a simplistic notion of disproportionality, and then we show that the effect of control-enhancing mechanisms on firm value has been overestimated in previous studies.
    OriginalsprogEngelsk
    TidsskriftApplied Financial Economics
    Vol/bind24
    Udgave nummer7
    Sider (fra-til)453-464
    ISSN0960-3107
    DOI
    StatusUdgivet - 4 mar. 2014

    Emneord

    • Ownership Structure
    • Power Indexes
    • Corporate Governance
    • Performance
    • Voting Power
    • Disproportionality

    Citationsformater