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Shareholder voting and efficient corporate decision-making

Author

Listed:
  • Lee, Kyounghun
  • Oh, Frederick Dongchuhl

Abstract

This study assesses the effects of shareholder voting on a firm’s decision-making by considering two voting methods: majority voting (MV) and quadratic voting (QV). Under MV, shareholders obtain voting rights in proportion to their shares, while under QV, they pay costs to buy voting rights. Our model demonstrates that under both MV and QV, the firm’s decision is efficient if shareholders collectively make the voting decisions. Moreover, shareholders can benefit from share trades resulting in the firm’s efficient decision.

Suggested Citation

  • Lee, Kyounghun & Oh, Frederick Dongchuhl, 2024. "Shareholder voting and efficient corporate decision-making," Research in Economics, Elsevier, vol. 78(4).
    • Handle: RePEc:eee:reecon:v:78:y:2024:i:4:s1090944324000747
    DOI: 10.1016/j.rie.2024.101010
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    More about this item

    Keywords

    Shareholder voting; Quadratic voting; Majority voting; Voting efficiency; Core;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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