Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 162: One Share-One Vote: New Empirical Evidence

Johan E. Eklund () and Thomas Poulsen ()
Additional contact information
Johan E. Eklund: The Ratio Institute and Jönköping International Business School, Postal: The Ratio Institute, P.O. Box 3203, SE-103 64 Stockholm, Sweden
Thomas Poulsen: Copenhagen Business School

Abstract: Shares with more voting rights than cash flow rights provide their owners with a disproportional influence that is often found to destroy the value of outside equity. This is taken as evidence of discretionary use of power. However, concentration of power does not necessarily result from control enhancing mechanisms; it could also be that some shareholders retain a large block in a one share-one vote structure. In this paper, we develop a methodology to disentangle disproportionality, which allows us to test the effect of deviations from one share-one vote more precisely. Our empirical findings add to the existing literature.

Keywords: Ownership structure; one share-one vote; proportionality; performance; entrenchment

JEL-codes: G32; G34

28 pages, December 17, 2010

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jee_tp_share-one_162.pdf PDF-file 

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