Shareholder voting and efficient corporate decision-making

Kyounghun Lee and Frederick Dongchuhl Oh

Research in Economics, 2024, vol. 78, issue 4

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.

Keywords: Shareholder voting; Quadratic voting; Majority voting; Voting efficiency; Core (search for similar items in EconPapers)
JEL-codes: C71 D58 G30 K22 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:78:y:2024:i:4:s1090944324000747

DOI: 10.1016/j.rie.2024.101010

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