The Value of Dual-Class Shares in Switzerland

42 Pages Posted: 9 Feb 2010 Last revised: 23 Mar 2010

See all articles by Hans Caspar von der Crone

Hans Caspar von der Crone

University of Zurich

Evgeny Plaksen

Ecole Polytechnique Fédérale de Lausanne - Ecole Polytechnique Fédérale de Lausanne

Date Written: March 2010

Abstract

We analyze the effect of dual-class structures on shareholder value of Swiss companies. Switzerland presents an ideal setting for studying the deviations from the one share-one vote rule due to the traditional popularity of multiple share classes. After accounting for self-selection into dual or single share category, we find strong positive effect of dual-class shares on firm value. Analysis of acquisition activities reveals that dual-class firms do not perform worse in acquisitions; contrary to that, in the recent years or among firms with low and moderate market-to-book values the returns to acquisitions are improved due to the dual-class structure.

Keywords: Dual-class shares, Insider Ownership, Firm Value, Acquisitions

JEL Classification: G32, G34

Suggested Citation

von der Crone, Hans Caspar and Plaksen, Evgeny, The Value of Dual-Class Shares in Switzerland (March 2010). Available at SSRN: https://ssrn.com/abstract=1542780 or http://dx.doi.org/10.2139/ssrn.1542780

Hans Caspar Von der Crone

University of Zurich ( email )

Rämistrasse 74/3
8001 Zürich
Switzerland

Evgeny Plaksen (Contact Author)

Ecole Polytechnique Fédérale de Lausanne - Ecole Polytechnique Fédérale de Lausanne ( email )

c/o University of Geneve
40, Bd du Pont-d'Arve
1211 Geneva, CH-6900
Switzerland

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