ON THE ESTIMATION OF THE VALUE OF VOTING RIGHTS: EVIDENCE FROM TAIWAN

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Abstract

This paper proposes that the value of voting rights can be measured as the abnormal return of the date after the ex-voting rights date. The merit of this method is that it is applicable to all publicly traded firms. Whatever the expected return model is adopted, the vote value hypothesis of Manne (1962) is hold by using a sample of firms listed on Taiwan Stock Market whose annual shareholder meetings have a board election. Moreover, the result shows that the value of voting rights is negatively related to prior year’s market value of equity, managerial equity ownership, and return on asset. It is consistent with the hypothesis that the source of vote value comes from private benefit of control and improved management.

Keywords: Voting Rights, Return, Board Election, General Shareholder Meeting

How to cite this paper: Huang, I.-H. (2006). On the estimation of the value of voting rights: Evidence from Taiwan. Corporate Ownership & Control, 3(2), 15-22. https://doi.org/10.22495/cocv3i2p2