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Dual-class shares and capital allocation decisions: Evidence from share repurchases and M&A activities

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  • Fiesenig, Bruno
  • Kunze, Simon
  • Schiereck, Dirk

Abstract

This study examines whether dual-class governance affects how investors and firms respond to major capital allocation decisions. Using U.S.-listed firms from 2014 to 2025, we analyze share repurchases and M&A transactions in which dual-class firms act as acquirers or targets. We assess announcement-period abnormal returns, long-horizon stock performance, and post-event operating performance relative to matched single-class firms. The results show a favorable market response to repurchase announcements by dual-class firms, while acquisition-related outcomes are more neutral. Dual-class acquirers do not exhibit systematic performance differences, and dual-class targets show lower announcement gains only in univariate comparisons. Across longer horizons and accounting outcomes, we find no evidence of persistent disadvantages associated with dual-class status. Overall, the findings indicate that unequal voting rights do not imply a uniform performance discount; their relevance depends on the type of capital allocation decision.

Suggested Citation

  • Fiesenig, Bruno & Kunze, Simon & Schiereck, Dirk, 2026. "Dual-class shares and capital allocation decisions: Evidence from share repurchases and M&A activities," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 161628, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:161628
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/161628/
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