Multi-Class Shares Around the World: The Role of Institutional Investors
Speaker(s)Pedro Matos (University of Virginia, United States)
LocationTinbergen Institute, room 1.01
Date and time
March 06, 2019
12:45 - 14:00
This paper examines multi-class share structures around the world. Using a comprehensive sample of publicly listed firms in 45 countries over the period 2001–2016, we find that institutional investors exhibit strong aversion towards multi-class firms, investing less in these firms and discount their valuation. The presence of institutional investors correlates with a higher likelihood of share-class unification. These effects are stronger for local (particularly U.S.) and actively managed investors. Overall, our paper highlights the role of institutional investors in the current debate regarding banning multi-class stocks from global stock indices.