Empirical Evidence on the Role of Proxy Advisors in European Capital Markets

46 Pages Posted: 1 Jul 2015 Last revised: 8 Mar 2017

See all articles by Joerg-Markus Hitz

Joerg-Markus Hitz

University of Goettingen

Nico Lehmann

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: March 7, 2017

Abstract

Responding to regulators’ requests and filling a void in the academic literature, this paper provides comprehensive empirical evidence on the role of proxy advisors in 14 European countries. Exploiting coverage data and using content analysis of proxy voting reports by Institutional Shareholder Services and Glass Lewis, we provide descriptive analyses of proxy advisors’ firm coverage, the variation and determinants of voting recommendations, the relation between voting recommendations and shareholder voting at annual general meetings, and market reactions to the release of voting recommendations. Overall, our findings suggest an economically important role of proxy advisors in European markets. Throughout our analyses, we document that this role varies with governance- and ownership-related firm characteristics and with country-level measures of institutional strength.

Keywords: Information intermediaries, proxy voting advisory, corporate governance

JEL Classification: C21, G34, M41

Suggested Citation

Hitz, Joerg-Markus and Lehmann, Nico, Empirical Evidence on the Role of Proxy Advisors in European Capital Markets (March 7, 2017). European Accounting Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2624653 or http://dx.doi.org/10.2139/ssrn.2624653

Joerg-Markus Hitz

University of Goettingen ( email )

Platz der Goettinger Sieben 3
D-37073 Goettingen
Germany
+49 551 39 7313 (Phone)

HOME PAGE: http://www.uni-goettingen.de/en/110622.html

Nico Lehmann (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
508
Abstract Views
2,615
Rank
101,419
PlumX Metrics