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Do Shareholders Vote Strategically? Voting Behavior, Proposal Screening, and Majority Rules

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  • Maug, Ernst

    (Chair for Corporate Finance, University of Mannheim and Sonderforschungsbereich 504)

  • Rydqvist, Kristian

    (SUNY at Binghamton - School of Management)

Abstract

We study shareholder voting on management proposals. We build on a simple model of strategic voting, provide structural estimates of its parameters, and derive testable implications. The evidence suggests that voting is strategic in the sense that shareholders take into account the information of other shareholders when making their voting decisions. We conclude that strategic voting prevents incorrect rejections of management proposals.

Suggested Citation

  • Maug, Ernst & Rydqvist, Kristian, 2007. "Do Shareholders Vote Strategically? Voting Behavior, Proposal Screening, and Majority Rules," Sonderforschungsbereich 504 Publications 07-35, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  • Handle: RePEc:xrs:sfbmaa:07-35
    Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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