Trust and Shareholder Voting

Trust and Shareholder Voting

Simon Lesmeister, Peter Limbach, Marc Goergen

Series number :

Serial Number: 

Date posted :

July 30 2018

Last revised :

July 28 2018
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  • culture • 
  • monitoring • 
  • Shareholder expropriation • 
  • Shareholder voting • 
  • trust

We test the hypothesis that a specific aspect of culture – trust in others – affects shareholder voting behavior as it lowers investors’ concerns of being expropriated. We find consistent evidence that the percentage of votes cast at shareholder meetings is lower in high-trust countries while the percentage of votes in support of management is higher.

Shocks to trust and IV regressions support this result. We also find that shareholder voting is more valuable in low-trust countries, as reflected by a more positive effect on future firm performance, which suggests that managers exploit low levels of monitoring less when trust is high.


Real name:
Simon Lesmeister
Real name: 
Peter Limbach