2019 Working Paper Prize

The 2019 Aberdeen Standard Investments Prize of EUR 5,000 has been awarded to Patrick Bolton (Columbia University and ECGI), Tao Li (University of Florida), Enrichetta Ravina (Northwestern University), Howard Rosenthal (New York University), for their paper on “Investor Ideology” (ECGI Finance Working Paper 557/2018).

The paper provides a new angle on understanding the voting behaviour of institutional investors. It draws on the notion that (institutional) investors are heterogeneous and have different ways of understanding and interpreting the corporate world. The paper innovates by drawing on research methods that political science researchers have developed to categorize and map the ideologies of political parties. It stands out because it examines an important aspect of corporate governance from a new angle. The jury was particularly enthusiastic about its innovativeness.

The 2019 Cleary Gottlieb Steen Hamilton Prize for the Best Paper in the ECGI Law Working Paper Series has been awarded to Lucian Bebchuk (Harvard Law School, NBER, CEPR and ECGI), and Scott Hirst (Boston University, Harvard Law School) for their paper on “Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy” (ECGI Law Working Paper 433/2018).

The paper provides a comprehensive theoretical, empirical and policy analysis of passive investment funds, which have become a central player both in the US and elsewhere. Due to agency problems, the paper shows, the managers of passive funds have significant incentives to under-invest in stewardship, as well as to defer excessively to corporate managers, relative to what would best serve the funds’ beneficial investors. The paper also provides detailed evidence regarding the stewardship activities of passive funds, puts forward a number of policy proposals for improving these activities, and discusses the implications of its agency-costs analysis for key corporate governance debates. The jury's selection for the prize reflects the importance of this paper's contribution to one of the key debates in today's corporate governance.

Referring to the awards, Professor Marco Becht, ECGI Executive Director said: 

“The Working Paper prizes exemplify the importance of the research conducted by the ECGI research members around the world and the applicability of that research to the real world. ECGI is very grateful to the sponsors, Aberdeen Standard Investments and Cleary Gottlieb Steen Hamilton for their support of the series.”