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Investor ideology

Patrick Bolton, Tao Li, Enrichetta Ravina and Howard Rosenthal

Journal of Financial Economics, 2020, vol. 137, issue 2, 320-352

Abstract: We estimate institutional investor preferences from proxy voting records. The W-NOMINATE method maps investors onto a left-right dimension based on votes for fiscal year 2012. Public pension funds and other investors on the left support a more social and environment-friendly orientation of the firm and fewer executive compensation proposals. “Money-conscious” investors appear on the right. The proxy advisor ISS makes voting recommendations that place it center, to the left of most large mutual funds. A second dimension reflects a more traditional governance view, with management-disciplinarian investors, the proxy advisor Glass Lewis among them, pitted against more management-friendly ones.

Keywords: Institutional investors; Proxy voting; Ideology; Spatial model (search for similar items in EconPapers)
JEL-codes: C80 D72 G23 G30 (search for similar items in EconPapers)
Date: 2020
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Working Paper: Investor Ideology (2019) Downloads
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DOI: 10.1016/j.jfineco.2020.03.004

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