The Role of Advisory Services in Proxy Voting
AbstractThis paper studies the information content and consequences of third-party voting advice issued during proxy contests. We document significant abnormal stock returns around proxy vote recommendations and develop an estimation procedure for disentangling stock price effects due to changes in outcome probabilities from those due to changes in outcome-contingent valuations. We find that voting advice is a good predictor of contest outcomes and that vote recommendations appear to certify the extent to which dissidents can add value. Thus, proxy advice seems to play a dual informational role in financial markets.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15143.
Date of creation: Jul 2009
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- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-11 (All new papers)
- NEP-CDM-2009-07-11 (Collective Decision-Making)
- NEP-POL-2009-07-11 (Positive Political Economics)
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- Daines, Robert M. & Gow, Ian D. & Larcker, David F., 2010. "Rating the ratings: How good are commercial governance ratings?," Journal of Financial Economics, Elsevier, vol. 98(3), pages 439-461, December.
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