  |
|
|
||||
|
||||
Vote Trading and Information Aggregation
Susan Kerr Christoffersen McGill University - Faculty of Management Christopher Geczy University of Pennsylvania - The Wharton School, Finance Department Adam V. Reed University of North Carolina at Chapel Hill - Finance Area David K. Musto University of Pennsylvania - Finance Department January 2007 AFA 2006 Boston Meetings Paper Sixteenth Annual Utah Winter Finance Conference ECGI - Finance Working Paper No. 141/2007 Abstract: The standard analysis of corporate governance is that shareholders vote in the ratios that firms choose, such as one-share-one-vote. But if the cost of unbundling and trading votes is sufficiently low, then shareholders choose the ratios. We document an active market for votes within the equity-loan market, where the average vote sells for zero. We hypothesize that asymmetric information motivates this trade, and find support in the cross section of votes: there is more trade for higher-spread firms and more for poor performers, especially when the vote is close. Vote trading corresponds to support for shareholder proposals and opposition to management proposals. Similar results obtain in the U.K.
Keywords: information aggregation, voting rights, equity lending, vote trading JEL Classifications: D82, G2, G39, K22 Working Paper SeriesDate posted: March 20, 2005 ; Last revised: February 01, 2007Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||
© 2010 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was served by apolloc 6 in 0.359 seconds.
One-Click Download
Facebook
Twitter
Digg
Del.icio.us
CiteULike
