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An Examination of Evidence on Voting Rights and The Market for Corporate Control

Author

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  • Wayne H. Mikkelson

    (College of Business Administration, University of Oregon, Eugene, Oregon 97403.)

  • M. Megan Partch

    (College of Business Administration, University of Oregon, Eugene, Oregon 97403.)

Abstract

This paper examines evidence related to voting rules and the market for voting rights. Several important findings emerge from recent studies. One set of evidence implies that it is desirable to have an active market in voting rights of a firm while another set of evidence indicates that lessening the effectiveness of this market is not harmful. Our view of this apparent contradiction is that all firms do not benefit equally from an active market for corporate control. Rather, for some firms, an optimal strategy may be to restrict participation in this market, although the characteristics of such firms are not clear. In general, we suggest that the effect of the market for corporate control on the value of firms is not fully understood.

Suggested Citation

  • Wayne H. Mikkelson & M. Megan Partch, 1985. "An Examination of Evidence on Voting Rights and The Market for Corporate Control," Australian Journal of Management, Australian School of Business, vol. 10(2), pages 67-82, December.
    • Handle: RePEc:sae:ausman:v:10:y:1985:i:2:p:67-82
    DOI: 10.1177/031289628501000204
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    References listed on IDEAS

    as
    1. Bhagat, Sanjai & Brickley, James A, 1984. "Cumulative Voting: The Value of Minority Shareholder Voting Rights," Journal of Law and Economics, University of Chicago Press, vol. 27(2), pages 339-365, October.
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    3. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    4. Dann, Larry Y. & DeAngelo, Harry, 1983. "Standstill agreements, privately negotiated stock repurchases, and the market for corporate control," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 275-300, April.
    5. Easterbrook, Frank H & Fischel, Daniel R, 1983. "Voting in Corporate Law," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 395-427, June.
    6. Lease, Ronald C & McConnell, John J & Mikkelson, Wayne H, 1984. "The Market Value of Differential Voting Rights in Closely Held Corporations," The Journal of Business, University of Chicago Press, vol. 57(4), pages 443-467, October.
    7. Linn, Scott C. & McConnell, John J., 1983. "An empirical investigation of the impact of `antitakeover' amendments on common stock prices," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 361-399, April.
    8. DeAngelo, Harry & DeAngelo, Linda, 1985. "Managerial ownership of voting rights : A study of public corporations with dual classes of common stock," Journal of Financial Economics, Elsevier, vol. 14(1), pages 33-69, March.
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    Keywords

    CORPORATE CONTROL; VOTING RIGHTS;

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