Trading and Shareholder Democracy

• 成果类型: Article
• 署名作者: Levit, Doron; Malenko, Nadya; Maug, Ernst
• 署名单位: University of Washington; University of Washington Seattle; European Corporate Governance Institute; Boston College; Centre for Economic Policy Research - UK; National Bureau of Economic Research; University of Mannheim; University of Mannheim
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13289
• 发表日期: 2024
• 页码: 257-304
• 关键词: corporate; INVESTMENT; MARKET; VOTE; equilibrium; governance; uncertainty; EFFICIENCY; OWNERSHIP; mechanism

摘要

We study shareholder voting in a model in which trading affects the composition of the shareholder base. Trading and voting are complementary, which gives rise to self-fulfilling expectations about proposal acceptance and multiple equilibria. Prices and shareholder welfare can move in opposite directions, so the former may be an invalid proxy for the latter. Relaxing trading frictions can reduce welfare because it allows extreme shareholders to gain more weight in voting. Delegating decision-making to the board can help overcome collective action problems at the voting stage. We also analyze the role of index investors and social concerns of shareholders.