Using a new dataset of corporate voting-rights from 1971 to 2015, we find that young dual-class firms trade at a premium and operate at least as efficiently as young single-class firms. As dualclass firms mature, their valuation declines, and they become less efficient in their margins, innovation, and labor productivity compared to their single-class counterparts.
Voting premiums increase with firm age, suggesting that private benefits increase over maturity. Most sunset provisions that dual-class firms adopt are ineffective. Our findings suggest that effective, timeconsistent sunset provisions would be based on age or on inferior shareholders’ periodic right to eliminate dual-class voting.
In 2021, several publicly traded companies, such as GameStop and AMC, experienced a dramatic influx of retail investors in their shareholder base. This...
This study examines the effect of outside director tenure length on firms’ market valuation and the voting behavior of outside directors. We make use...