סמינר במימון חשבונאות

Miriam Schwartz-Ziv,  Michigan State University

We study the relation between shareholder votes and trading. We demonstrate that around the shareholder meeting date, the abnormal daily volume, number of trades, and volatility are all substantially larger compared to the pre-voting period. This increase is particularly strong around important votes and when shareholders are unsupportive of management. We next analyze the vote-trade relationship at the investor level, using data on daily trades and the corresponding votes of the same funds. We find that when the aggregate vote outcome contradicts a fund’s vote, the fund updates its trading patterns and aligns them in the direction of the vote outcome. We also show that votes catalyze trading particularly when the price reaction is large, the vote outcome is surprising, higher degrees of information asymmetries exist, and investors are not distracted.