Shareholders' agreements and voting power. Evidence from Italian listed firms

Angelo Baglioni

No ief0081, DISCE - Quaderni dell'Istituto di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)

Abstract: This work provides an empirical investigation of shareholders’ agreements signed in Italy over the last decade. The focus is on the impact of agreements on the voting power (Shapley value) of participants. The evidence shows that agreements produce a remarkable reshuffling of voting power. Two views are confronted. First: agreements allow the largest shareholder to increase his power beyond his own voting rights, exploiting a leverage effect. Second: agreements are a way to share control among a coalition of large shareholders, thus limiting the ability of the first one to extract private benefits of control. The leverage effect seems to prevail at lower levels of ownership concentration, while the shared control view works better at higher levels of ownership concentration. Supermajority rules – a tool to reach a more balanced distribution of power – are more likely to be adopted when the first owner has a larger equity stake.

Keywords: Corporate governance; shareholders’ agreements; large shareholder; voting power; one-share-one-vote. (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Pages: nn pages 21
Date: 2008-05
New Economics Papers: this item is included in nep-cdm and nep-cfn
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Citations: View citations in EconPapers (4)

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