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Investor protection and share prices: Evidence from statutory rules governing variations of shareholders’ class rights in Russia

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Author Info
Muravyev, Alexander

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Abstract

This paper uses a quasi-experimental framework provided by recent changes in Russian corporate law to study the effect of investor protection on the value of shares. The legal change analyzed involves the empowerment of preferred (non-voting) shareholders to veto unfavorable changes in their class rights. Based on a novel hand-collected dataset of dual class stock companies in Russia and using the difference-in-difference estimator, the study finds a statistically and economically significant effect of improved protection of preferred shareholders on the value of their shares. The result is robust to several changes in the empirical specification.

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File URL: http://mpra.ub.uni-muenchen.de/13678/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13678.

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Date of creation: 22 Jan 2009
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Handle: RePEc:pra:mprapa:13678

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Related research
Keywords: investor protection; company law; dual class stock; class rights; Russia;

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Find related papers by JEL classification:
G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
K22 - Law and Economics - - Regulation and Business Law - - - Corporation and Securities Law
G30 - Financial Economics - - Corporate Finance and Governance - - - General

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  3. William N. Goetzmann & Matthew Spiegel & Andrey Ukhov, 2003. "Modeling and Measuring Russian Corporate Governance: The Case of Russian Preferred and Common Shares," NBER Working Papers 9469, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Zingales, Luigi, 1994. "The Value of the Voting Right: A Study of the Milan Stock Exchange Experience," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 7(1), pages 125-48. [Downloadable!] (restricted)
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    Other versions:
  25. Paul Gompers & Joy Ishii & Andrew Metrick, 2003. "Corporate Governance And Equity Prices," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 107-155, February. [Downloadable!] (restricted)
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  26. Harris, Milton & Raviv, Artur, 1988. "Corporate control contests and capital structure," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 55-86, January. [Downloadable!] (restricted)
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