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News flow as a determinant of the voting premium of dual-class shares

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  • de La Bruslerie, Hubert

Abstract

This article investigates the voting premium between two simultaneously traded classes of shares. We use a sample of dual-class firms listed in the U.S. and Canada for the 2012–2022 period to identify the determinants of the size of the voting premium. We do not confirm the results documented in the literature that the relative illiquidity between the two classes may explain the voting premium. The empirical tests also support the leverage effect hypothesis, a new feature in the literature. The empirical analysis also shows volatile voting premiums. We demonstrate that the voting premiums are not linked to the positive or negative sentiments attached to the disclosed information. This article contributes to the literature by showing that this instability is related to the magnitude of the news flow brought to the market about the controlling ownership’s change and the strategic shareholders’ behavior.

Suggested Citation

  • de La Bruslerie, Hubert, 2025. "News flow as a determinant of the voting premium of dual-class shares," International Review of Law and Economics, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:irlaec:v:82:y:2025:i:c:s0144818825000262
    DOI: 10.1016/j.irle.2025.106270
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    More about this item

    Keywords

    Dual-class shares; Multiple voting rights; Ownership concentration; Voting premium; News flow; Debt leverage; Constituency statutes;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K0 - Law and Economics - - General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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