Shareholders' agreements and voting power. Evidence from Italian listed firms
AbstractThis work provides an empirical investigation of shareholders’ agreements signed in Italy over the last decade. The focus is on the impact of agreements on the voting power (Shapley value) of participants. The evidence shows that agreements produce a remarkable reshuffling of voting power. Two views are confronted. First: agreements allow the largest shareholder to increase his power beyond his own voting rights, exploiting a leverage effect. Second: agreements are a way to share control among a coalition of large shareholders, thus limiting the ability of the first one to extract private benefits of control. The leverage effect seems to prevail at lower levels of ownership concentration, while the shared control view works better at higher levels of ownership concentration. Supermajority rules – a tool to reach a more balanced distribution of power – are more likely to be adopted when the first owner has a larger equity stake.
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Bibliographic InfoPaper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Economia e Finanza with number ief0081.
Length: nn pages 21
Date of creation: May 2008
Date of revision:
Corporate governance; shareholders’ agreements; large shareholder; voting power; one-share-one-vote.;
Other versions of this item:
- Angelo Baglioni, 2011. "Shareholders' agreements and voting power: evidence from Italian listed firms," Applied Economics, Taylor and Francis Journals, vol. 43(27), pages 4043-4052.
- G3 - Financial Economics - - Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-07 (All new papers)
- NEP-CDM-2008-06-07 (Collective Decision-Making)
- NEP-CFN-2008-06-07 (Corporate Finance)
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