Heterogeneity and peer effects in mutual fund proxy voting
نویسندگان
چکیده
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. & 2010 Elsevier B.V. All rights reserved. The election of directors is the most important shareholder franchise. Larry Sonsini, Chairman, NYSE Proxy Working Group (NYSE, 2006).
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