The Vote is cast: The effect of Corporate Governance on Shareholder Value
Vicente Cuñat (),
Mireia Gine () and
Maria Guadalupe ()
FMG Discussion Papers from Financial Markets Group
This paper estimates the effect of corporate governance provisions on shareholder value and long-term outcomes in S&P1500 firms. We apply a regression discontinuity design to shareholder votes on governance proposals in annual meetings. A close-call vote around the majority threshold is akin to a random outcome, allowing us to deal with prior expectations and the endogeneity of internal governance rules. Passing a corporate governance provision generates a 1.3% abnormal return on the day of the vote with an implied market value per provision of 2.8%. We also find evidence of changes in investment behaviour and long-term performance improvements.
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http://www.lse.ac.uk/fmg/workingPapers/discussionP ... 010TheVoteisCast.pdf (application/pdf)
Journal Article: The Vote Is Cast: The Effect of Corporate Governance on Shareholder Value (2012)
Working Paper: The Vote is Cast: The Effect of Corporate Governance on Shareholder Value (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:fmg:fmgdps:dp663
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