Investor Ideology

Patrick Bolton, Tao Li, Enrichetta Ravina and Howard L. Rosenthal

No 25717, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate institutional investor preferences based on their proxy voting records in publicly listed Russell 3000 firms. We employ a spatial model of proxy voting, the W-NOMINATE method for scaling legislatures, and map institutional investors onto a left-right dimension based on their votes for fiscal year 2012. The far-left are socially responsible and the far-right are “money conscious” investors. Significant ideological differences reflect an absence of shareholder unanimity. The proxy adviser ISS, similar to a political leader, makes voting recommendations that place it in the center; to the left of most mutual funds. Public pension funds and other investors on the left support a more social and environment-friendly orientation of the firm and fewer executive compensation proposals. A second dimension reflects a more traditional governance view, with management disciplinarian investors, the proxy adviser Glass-Lewis among them, pitted against more management friendly ones.

JEL-codes: G23 G30 (search for similar items in EconPapers)
Date: 2019-03
Note: CF EEE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Patrick Bolton & Tao Li & Enrichetta Ravina & Howard Rosenthal, 2020. "Investor ideology," Journal of Financial Economics, .

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