One Share-One Vote: The Empirical Evidence*
University of Queensland and ECGI
London School of Economics, CEPR and ECGI
We survey the empirical literature on disproportional ownership, i.e. the use of mechanisms that separate voting rights from cash flow rights in corporations. Our focus is mostly on explicit mechanisms that allow some shareholders to acquire control with less than proportional economic interest in the firm (dual-class equity structures, stock pyramids, cross-ownership, etc.), but we also briefly discuss other mechanisms, such as takeover defenses and fiduciary voting. We provide a broad overview of different areas in this literature and highlight problems of interpretation that may arise because of empirical difficulties. We outline potentially promising areas for future research.
JEL Classification Numbers: G32, G34
* We thank Marco Becht, Morten Bennedsen, Mike Burkart, Léo Goldschmidt, Samuel Lee and especially Marco Pagano (the editor) and two anonymous referees for comments. This survey is based on work the authors conducted in conjunction with International Shareholder Services (ISS), Sherman and Sterling LLP and the European Corporate Governance Institute (ECGI) on behalf of the European Commission. The views expressed in this article are solely ours and do not represent the official views of the aforementioned organizations.