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Investor Protection and the Value of Shares: Evidence from Statutory Rules Governing Variations of Shareholders' Class Rights in Russia

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Listed author(s):
  • Muravyev, Alexander

    ()

    (Higher School of Economics, St. Petersburg branch)

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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4669.

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Length: 43 pages
Date of creation: Dec 2009
Handle: RePEc:iza:izadps:dp4669
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Keywords: company law; Russia; investor protection; class rights; dual class stock;

Find related papers by JEL classification:

  • G30 - Financial Economics - - Corporate Finance and Governance - - - General
  • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
  • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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Cited by:

  1. Muravyev, Alexander & Berezinets, Irina & Ilina, Yulia, 2012. "Корпоративные Конфликты И Политика Фирм В Области Занятости И Заработной Платы
    [Corporate Governance Conflicts and Employment and Wage Policies of Companies]    ," MPRA Paper 40215, University Library of Munich, Germany.

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