Changing corporate governance norms

Evidence from dual class shares in the UK

Fabio Braggion, M. Giannetti

Research output: Contribution to journalArticleScientificpeer-review

Abstract

In the UK, 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 was 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 undervalued. These and other results suggest that investor demand may lead firms to abandon dual class shares.
Original languageEnglish
Pages (from-to)15-27
JournalJournal of Financial Intermediation
Volume37
Early online dateMay 2017
DOIs
Publication statusPublished - Jan 2019

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Corporate governance
Dual class shares
Vote
Relative valuation
Investors
Pessimism

Keywords

  • corporate governance
  • dual class shares
  • investor demand
  • public debate

Cite this

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Changing corporate governance norms : Evidence from dual class shares in the UK. / Braggion, Fabio; Giannetti, M.

In: Journal of Financial Intermediation, Vol. 37, 01.2019, p. 15-27.

Research output: Contribution to journalArticleScientificpeer-review

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