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The Shared Costs of Pursuing Shareholder Values

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  • Michele Fioretti
  • Victor Saint-Jean
  • Simon C. Smith

Abstract

We uncover latent conflicts among shareholders, showing how private reputational rents for a few impose losses on many. Exploiting predetermined Annual General Meeting dates relative to COVID-19 and the Russian invasion of Ukraine as exogenous media spotlights, we find that prominent individual shareholders backed early donations or rapid exits from Russia to enhance their reputations. Less visible financial investors opposed such actions and pursued their reputation through their own giving instead. Our design accounts for governance, managerial access, and alternative shareholder motives. Firms most exposed to rent-seeking reduced investment, productivity, and profitability by 1-3%, with adverse effects lasting two years.

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  • Michele Fioretti & Victor Saint-Jean & Simon C. Smith, 2021. "The Shared Costs of Pursuing Shareholder Values," Papers 2103.12138, arXiv.org, revised Sep 2025.
    • Handle: RePEc:arx:papers:2103.12138
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    File URL: http://arxiv.org/pdf/2103.12138
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    Cited by:

    1. Michele Fioretti & Victor Saint-Jean & Simon C. Smith, 2024. "NGO Activism: Exposure vs. Influence," Papers 2411.06875, arXiv.org, revised May 2025.

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