Heterogeneity and peer effects in mutual fund proxy voting |
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Authors: | Gregor Matvos Michael Ostrovsky |
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Affiliation: | 1. University of Chicago Booth School of Business, Chicago, IL 60637, USA;2. Graduate School of Business, Stanford University, Stanford, CA 94305, USA |
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Abstract: | This paper studies voting in corporate director elections. We construct a comprehensive data set of 2,058,788 mutual fund votes over a two-year period. We find systematic heterogeneity in voting: some funds are consistently more management-friendly than others. We also establish the presence of peer effects: a fund is more likely to oppose management when other funds are more likely to oppose it, all else being equal. We estimate a voting model whose supermodular structure allows us to compute social multipliers due to peer effects. Heterogeneity and peer effects are as important in shaping voting outcomes as firm and director characteristics. |
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Keywords: | Proxy voting Boards of directors Director elections Peer effects and strategic complementarities Supermodular games |
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