Abstract

https://ssrn.com/abstract=2138949
 


 



Changing Corporate Governance Norms: Evidence from Dual Class Shares in the U.K.


Fabio Braggion


Tilburg University - Center and Faculty of Economics and Business Administration; Tilburg University - European Banking Center

Mariassunta Giannetti


Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swedish House of Finance

March 24, 2017

ECGI - Finance Working Paper No. 375

Abstract:     
In the U.K., between 1955 and 1970, dual class shares quickly lost popularity without any regulatory intervention. The decline in the use of dual class shares was positively correlated with the relative valuations of one-share-one-vote and dual class firms, which in turn were related to media pessimism on the use of dual class shares. Following periods with high relative valuations of one-share-one-vote, one-share-one-vote firms exhibited lower returns than dual class firms suggesting that the latter were relatively undervalued. These and other results suggest that investor demand may lead firms to abandon dual class shares.

Number of Pages in PDF File: 50

Keywords: Corporate Governance, Dual Class Shares, Investor Demand, Public Debate

JEL Classification: G3, G1, N24


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Date posted: September 1, 2012 ; Last revised: February 25, 2017

Suggested Citation

Braggion, Fabio and Giannetti, Mariassunta, Changing Corporate Governance Norms: Evidence from Dual Class Shares in the U.K. (March 24, 2017). ECGI - Finance Working Paper No. 375. Available at SSRN: https://ssrn.com/abstract=2138949 or http://dx.doi.org/10.2139/ssrn.2138949

Contact Information

Fabio Braggion
Tilburg University - Center and Faculty of Economics and Business Administration ( email )
P.O. Box 90153
Tilburg, 5000 LE
Netherlands
Tilburg University - European Banking Center ( email )
PO Box 90153
Tilburg, 5000 LE
Netherlands

Mariassunta Giannetti (Contact Author)
Stockholm School of Economics ( email )
P.O. Box 6501
Sveavagen 65
SE-113 83 Stockholm
Sweden
+46 8 736 9607 (Phone)
+46 8 312 327 (Fax)
HOME PAGE: http://sites.google.com/site/mariassuntagiannetti/Home
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Swedish House of Finance ( email )
Drottninggatan 98
111 60 Stockholm
Sweden

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