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Costs of voting and firm performance: Evidence from RegTech adoption in Chinese listed firms

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  • Lan, Ge
  • Li, Donghui
  • Yang, Shijie

Abstract

Employing the 2014 mandatory adoption of online shareholder voting in China, we show that the reduction of voting costs through online voting is positively related to participation in shareholder meetings and future firm performance. Our mechanism analysis suggests that the improved firm performance is mainly driven by the enhanced governance role played by informed investors and institutional investors. Further analysis shows that online shareholder voting makes the firms more attractive to mutual fund managers who are far away from the firms. Moreover, we find that the improved firm performance is concentrated in firms with low controlling shareholder ownership, and that online shareholder voting is associated with an increased likelihood of vetoing proposals and lower tunneling.

Suggested Citation

  • Lan, Ge & Li, Donghui & Yang, Shijie, 2023. "Costs of voting and firm performance: Evidence from RegTech adoption in Chinese listed firms," Research in International Business and Finance, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:riibaf:v:64:y:2023:i:c:s0275531922002549
    DOI: 10.1016/j.ribaf.2022.101868
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    More about this item

    Keywords

    Annual General Meetings; Costs of Voting; Online Shareholder Voting; Shareholder Monitoring; RegTech;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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