Capital gains lock-in and governance choices

• 成果类型: Article
• 署名作者: Dimmock, Stephen G.; Gerken, William C.; Ivkovic, Zoran; Weisbenner, Scott J.
• 署名单位: Nanyang Technological University; University of Kentucky; Michigan State University; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2017.11.001
• 发表日期: 2018
• 页码: 113-135
• 关键词: Mutual fund; Proxy voting; corporate governance; Capital-gains tax; lock-in effect

摘要

Differences in accrued gains and investors' tax-sensitivity induce variation in a capital gains lock-in effect across mutual funds even for the same stock at the same time. Exploiting this variation, we show this effect influences funds' governance decisions: higher capital gains decrease the likelihood a fund exits prior to contentious votes and increase the likelihood a fund votes against management. Consistent with tax motivation, these findings are concentrated among funds with tax-sensitive investors. Further, high aggregate capital gains across funds holding a stock predict a higher likelihood management loses a vote and a lower likelihood a contentious vote is proposed. (C) 2017 Elsevier B.V. All rights reserved.