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The determinants of the voting premium in Italy: The evidence from 1974 to 2003

  • Caprio, Lorenzo
  • Croci, Ettore
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    We examine the voting premium in Italy in the period 1974 to 2003, when it ranged from 1% to 100%. At firm level, the measure of the price differential between voting and non-voting stocks cannot be fully explained without taking into account the effect of the largest shareholder's identity. Family-controlled firms have higher voting premiums, especially when the family owns a large stake in the company's voting equity and the founder is the firm's CEO and/or Chairman. We explain this result by showing that families attach greater importance to control and are more prone than other types of controlling shareholders to expropriate the non-voting class of shareholders.

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    File URL: http://www.sciencedirect.com/science/article/B6VCY-4S98TXB-1/2/b75e19a2ebe491c4352f1152e30996c5
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    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 32 (2008)
    Issue (Month): 11 (November)
    Pages: 2433-2443

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    Handle: RePEc:eee:jbfina:v:32:y:2008:i:11:p:2433-2443
    Contact details of provider: Web page: http://www.elsevier.com/locate/jbf

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