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One Share-One Vote: New Empirical Evidence

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  • Eklund , Johan

    (Jönköping International Business School and Ratio Institute)

  • Poulsen, Thomas

    (Copenhagen Business School)

Abstract

Shares with more voting rights than cash flow rights provide their owners with a disproportional influence that is often found to destroy the value of outside equity. This is taken as evidence of discretionary use of power. However, concentration of power does not necessarily result from control enhancing mechanisms; it could also be that some shareholders retain a large block in a one share-one vote structure. In this paper, we develop a methodology to disentangle disproportionality, which allows us to test the effect of deviations from one share-one vote more precisely. Our empirical findings add to the existing literature.

Suggested Citation

  • Eklund , Johan & Poulsen, Thomas, 2010. "One Share-One Vote: New Empirical Evidence," Working Paper Series in Economics and Institutions of Innovation 238, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0238
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    References listed on IDEAS

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    1. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
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    Cited by:

    1. Basu, Debarati & Sen, Kaustav, 2015. "Financial decisions by business groups in India: Is it “fair and square”?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(2), pages 121-137.

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    More about this item

    Keywords

    Ownership structure; one share-one vote; proportionality; performance; entrenchment;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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