Investor Protection and Share Prices: Evidence from Statutory Rules Governing Variations of Shareholders' Class Rights in Russia

38 Pages Posted: 22 Jan 2009 Last revised: 8 Jul 2009

See all articles by Alexander Muravyev

Alexander Muravyev

Saint Petersburg Branch National Research University Higher School of Economics; Institute for the Study of Labor (IZA)

Date Written: January 22, 2009

Abstract

This paper uses a quasi-experimental framework provided by recent changes in Russian corporate law to study the effect of investor protection on the value of shares. The legal change analyzed involves the empowerment of preferred (non-voting) shareholders to veto unfavorable changes in their class rights. Based on a novel hand-collected dataset of dual class stock companies in Russia and using the difference-in-difference estimator, the study finds a statistically and economically significant effect of improved protection of preferred shareholders on the value of their shares. The result is robust to several changes in the empirical specification.

Keywords: investor protection, company law, dual class stock, class rights, Russia

JEL Classification: G30, G38, K22

Suggested Citation

Muravyev, Alexander, Investor Protection and Share Prices: Evidence from Statutory Rules Governing Variations of Shareholders' Class Rights in Russia (January 22, 2009). DIW Berlin Discussion Paper No. 865, Available at SSRN: https://ssrn.com/abstract=1331367 or http://dx.doi.org/10.2139/ssrn.1331367

Alexander Muravyev (Contact Author)

Saint Petersburg Branch National Research University Higher School of Economics ( email )

Kantemirovskaya str. 3a
St. Petersburg, 194000
Russia

HOME PAGE: http://https://www.hse.ru/en/org/persons/127811036

Institute for the Study of Labor (IZA) ( email )

Schaumburg-Lippe-Str. 5-9
Bonn, D-53113
Germany

HOME PAGE: http://www.iza.org/en/webcontent/index_html

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