Costs of voting and firm performance: Evidence from RegTech adoption in Chinese listed firms |
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| Affiliation: | 1. College of Economics, Shenzhen University, Room 2507, Building of Humanity, No 3688 Road of Nanhai, Nanshan District, Shenzhen, China;2. Nottingham University Business School China, University of Nottingham Ningbo, 199 Taikang E Rd, Yinzhou, Ningbo, Zhejiang, China;3. School of Management and Economics and Shenzhen Finance Institute, The Chinese University of Hong Kong, Shenzhen, 2001 Longxiang Road, Longgang District, Shenzhen 518172, China |
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| Abstract: | Employing the 2014 mandatory adoption of online shareholder voting in China, we show that the reduction of voting costs through online voting is positively related to participation in shareholder meetings and future firm performance. Our mechanism analysis suggests that the improved firm performance is mainly driven by the enhanced governance role played by informed investors and institutional investors. Further analysis shows that online shareholder voting makes the firms more attractive to mutual fund managers who are far away from the firms. Moreover, we find that the improved firm performance is concentrated in firms with low controlling shareholder ownership, and that online shareholder voting is associated with an increased likelihood of vetoing proposals and lower tunneling. |
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| Keywords: | Annual General Meetings Costs of Voting Online Shareholder Voting Shareholder Monitoring RegTech |
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