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Academic SeminarWhat Does the Value of Corporate Votes Tell Us About Future Stock Returns?

  • Date
  • 2018-05-31 ~ 2018-05-31
  • Time
  • 16:00 ~ 17:00
  • Place
  • Building 9, 7th floor #9708
  • Department
  • School of Management Engineering
  • Major
  • Finance

We would like to invite you to participate in Management Engineering (ME) Seminar.

1. When: May 31st(Thu) 16:00~17:30
2. Where: Building 9, 7th floor #9708
3. Speaker: Prof. Kim, Hagen (Texas A&M University)
4. Topic: What Does the Value of Corporate Votes Tell Us About Future Stock Returns?
5. Research field: Finance

* Lecture will be delivered in English.
* The paper will be distributed in hard copy to all attendees.

Firms with higher (lower) vote values have significantly lower (higher) future returns. Constructing portfolios based on an option-based measure of the value of voting rights yields average return spreads of about 0.8% per month between low and high vote portfolios, and the return differences persist up to nine months. Further, value of voting rights based on dual class firms generates similar results. Various robustness checks reveal that models of informed trading or short sale constraints cannot explain our results. Plus, results are still significant controlling for market liquidity as well as other pricing factors. Our findings are consistent with the proposition that investors hedge against potential unwanted outcomes in future control contests by accumulating stocks when such events are more likely to occur.

Contact : Lee, Jisun ( jisunlee@kaist.ac.kr )