Shareholder Democracy Under Autocracy: Voting Rights and Corporate Performance in Imperial Russia
43 Pages Posted: 9 Aug 2021 Last revised: 11 Aug 2021
Date Written: May 18, 2021
This paper investigates how the rules that corporations wrote for themselves related to their financing and performance in an environment characterized by poor investor protections, Imperial Russia. We present new data on detailed governance provisions from Imperial Russian corporate charters, which we connect to a comprehensive panel database of corporate balance sheets from 1899to 1914. We document how variation in votes per share and other shareholder rights provisions were related to corporate choices of using debt vs. equity and whether these governance provisions correlated systematically with performance measures on the balance sheet and in terms of the market-to-book ratio. This investigation reveals the tradeoffs weighed by Imperial Russian corporations and demonstrates the surprising flexibility that Russian corporations enjoyed, conditional on obtaining a corporate charter.
Keywords: corporate governance, corporate finance, Imperial Russia, economic history
JEL Classification: G34, G32, N23, N63
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