Affiliation:
1. Rutgers Business School
2. University of Mannheim Business School and ECGI
3. Hebrew University of Jerusalem Business School and ECGI
Abstract
Abstract
This paper analyzes how trading after shareholder meetings changes the composition of the shareholder base. Analyzing daily trades, we find that mutual funds reduce their holdings if their votes are opposed to the voting outcome. Trading volume is high even when stock prices do not change, peaks on the meeting date, and remains high up to four weeks after shareholder meetings. The results support models based on differences of opinion that predict that shareholders’ beliefs may diverge more after observing voting outcomes. Hence, trading after meetings creates a more homogeneous shareholder base, which has important implications for corporate governance.
Publisher
Oxford University Press (OUP)
Subject
Economics and Econometrics,Finance,Accounting
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