Dual-class shares and capital allocation decisions: Evidence from share repurchases and M&A activities

Bruno Fiesenig, Simon Kunze and Dirk Schiereck

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This study examines whether dual-class governance affects how investors and firms respond to major capital allocation decisions. Using U.S.-listed firms from 2014 to 2025, we analyze share repurchases and M&A transactions in which dual-class firms act as acquirers or targets. We assess announcement-period abnormal returns, long-horizon stock performance, and post-event operating performance relative to matched single-class firms. The results show a favorable market response to repurchase announcements by dual-class firms, while acquisition-related outcomes are more neutral. Dual-class acquirers do not exhibit systematic performance differences, and dual-class targets show lower announcement gains only in univariate comparisons. Across longer horizons and accounting outcomes, we find no evidence of persistent disadvantages associated with dual-class status. Overall, the findings indicate that unequal voting rights do not imply a uniform performance discount; their relevance depends on the type of capital allocation decision.

Date: 2026
Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/161628/
References: Add references at CitEc
Citations:

Published in Review of Financial Economics 4 (2026)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:dar:wpaper:161628

Access Statistics for this paper

More papers in Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL) Contact information at EDIRC.
Bibliographic data for series maintained by Dekanatssekretariat ().