Investor Protection and Share Prices: Evidence from Statutory Rules Governing Variations of Shareholders' Class Rights in Russia

Alexander Muravyev
Authors registered in the RePEc Author Service: Александр Муравьев

No 865, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper uses a quasi-experimental framework provided by recent changes in Russian corporate law to study the effect of investor protection on the value of shares. The legal change analyzed involves the empowerment of preferred (non-voting) shareholders to veto unfavorable changes in their class rights. Based on a novel hand-collected dataset of dual class stock companies in Russia and using the difference-in-difference estimator, the study finds a statistically and economically significant effect of improved protection of preferred shareholders on the value of their shares. The result is robust to several changes in the empirical specification.

Keywords: Investor protection; company law; dual class stock; class rights; Russia (search for similar items in EconPapers)
JEL-codes: G30 G38 K22 (search for similar items in EconPapers)
Pages: 38 p.
Date: 2009
New Economics Papers: this item is included in nep-cfn and nep-cis
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Related works:
Working Paper: Investor protection and share prices: Evidence from statutory rules governing variations of shareholders’ class rights in Russia (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp865

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