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http://ssrn.com/abstract=1894942
 
 

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The Role of Mutual Funds in Corporate Governance: Evidence from Mutual Funds’ Proxy Voting and Trading Behavior


Ying Duan


University of Alberta - Department of Finance and Statistical Analysis

Yawen Jiao


University of California, Riverside

June 24, 2014

Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
This paper examines mutual fund families’ proxy voting records to analyze their choices between voting against management (“voice”) and voting with their feet (“exit”). Even though proxy voting is particularly conducive to governance through voice rather than exit, we provide evidence that both exit and voice are important governance mechanisms when Institutional Shareholder Services recommends voting against management. Funds with smaller ownership blocks and shorter investment horizons are more likely to exit, and funds are more likely to exit small, liquid firms with greater insider ownership.

Number of Pages in PDF File: 47

Keywords: mutual funds, proxy voting, exit, governance

JEL Classification: G23, G34

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Date posted: July 25, 2011 ; Last revised: July 12, 2014

Suggested Citation

Duan, Ying and Jiao, Yawen, The Role of Mutual Funds in Corporate Governance: Evidence from Mutual Funds’ Proxy Voting and Trading Behavior (June 24, 2014). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1894942 or http://dx.doi.org/10.2139/ssrn.1894942

Contact Information

Ying Duan (Contact Author)
University of Alberta - Department of Finance and Statistical Analysis ( email )
2-32C Business Building
Edmonton, Alberta T6G 2R6
Canada

Yawen Jiao
University of California, Riverside ( email )
Riverside, CA 92521
United States
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