IESE Business School
Av. Pearson 21
Information about this author at RePEc
NBER Working Papers and Publications
|December 2010||The Vote is Cast: The Effect of Corporate Governance on Shareholder Value|
with Vicente Cuñat, Maria Guadalupe: w16574
This paper estimates the effect of corporate governance provisions on shareholder value and long-term outcomes in S&P1500 firms. We apply a regression discontinuity design to shareholder votes on governance proposals in annual meetings. A close-call vote around the majority threshold is akin to a random outcome, allowing us to deal with prior expectations and the endogeneity of internal governance rules. Passing a corporate governance provision generates a 1.3% abnormal return on the day of the vote with an implied market value per provision of 2.8%. We also find evidence of changes in investment behavior and long-term performance improvements.
Published: Vicente CuÃ±at & Mireia Gine & Maria Guadalupe, 2012. "The Vote Is Cast: The Effect of Corporate Governance on Shareholder Value," Journal of Finance, American Finance Association, vol. 67(5), pages 1943-1977, October. citation courtesy of