The Voting Premium

Doron Y. Levit, Nadya Malenko and Ernst G. Maug

No 31892, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a unified theory of blockholder governance and the voting premium, in a setting without takeovers and controlling shareholders. A voting premium emerges when a minority blockholder tries to influence the composition of the shareholder base by accumulating votes and buying shares from dissenting shareholders. Empirical measures of the voting premium do not reflect the value of voting rights or voting power. A negative voting premium results from free-riding by dispersed shareholders on the blockholder’s trades. Conflicts between dispersed shareholders and the blockholder endogenously increase the liquidity of voting shares, but do not necessarily increase the voting premium.

JEL-codes: D72 D74 G34 (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-cdm and nep-pol
Note: CF
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Working Paper: The voting premium (2021)
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