The determinants of the voting premium in Italy: The evidence from 1974 to 2003

Lorenzo Caprio and Ettore Croci

Journal of Banking & Finance, 2008, vol. 32, issue 11, 2433-2443

Abstract: We examine the voting premium in Italy in the period 1974 to 2003, when it ranged from 1% to 100%. At firm level, the measure of the price differential between voting and non-voting stocks cannot be fully explained without taking into account the effect of the largest shareholder's identity. Family-controlled firms have higher voting premiums, especially when the family owns a large stake in the company's voting equity and the founder is the firm's CEO and/or Chairman. We explain this result by showing that families attach greater importance to control and are more prone than other types of controlling shareholders to expropriate the non-voting class of shareholders.

Keywords: Non-voting; shares; Voting; premium; Dual-class; share; firms; Family; Italy (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:32:y:2008:i:11:p:2433-2443

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