Free riding or participation in governance: Minority shareholders’ online voting and corporate responsiveness

Xin Cui, Lulu Wen, Kai Huang and Jiayi Li

Research in International Business and Finance, 2024, vol. 70, issue PB

Abstract: Leveraging the natural experiment afforded by the Shenzhen Stock Exchange’s mandate for listed companies to offer an online voting platform to minority shareholders, this paper examines the relationship between minority shareholders’ online voting, corporate responsiveness, and stock price crash risk. Findings indicate that minority shareholder participation in online voting mitigates stock price crash risk. Regarding economic mechanisms, minority shareholders’ engagement in online voting can enhance corporate responsiveness to external information disclosure demand, thereby reducing the likelihood of management concealing negative news and subsequently lowering the stock price crash risk. Moreover, heterogeneity analysis shows that the impact of online voting is pronounced among companies with smaller market capitalization, lower leverage, non-state ownership, and less external oversight. Last, this study further identifies a beneficial impact of minority shareholder voting on crash risk reduction, even in companies predominantly controlled by majority shareholders.

Keywords: Minority shareholder, Online voting, Stock price crash risk, Corporate governance (search for similar items in EconPapers)
JEL-codes: G30 G34 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0275531924001685
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pb:s0275531924001685

DOI: 10.1016/j.ribaf.2024.102375

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().