Paper accepted for publication

Their paper “Voting and Trading on Public Information” has been accepted for publication in the Review of Financial Studies.

Paper: Voting and Trading on Public Information

Authors: Markus Parlasca (WU), Paul Voss (HEC Paris)

Abstract: This paper examines how public information, such as proxy advice, affects shareholder voting and, consequently, corporate decision-making. We find that while public information improves the voting decisions of uninformed shareholders, it also causes privately informed shareholders to exit rather than exercise their right to vote. As a result, public information impairs information aggregation through voting but improves information aggregation through trading. Overall, public information can undermine corporate decision-making. Furthermore, slightly more precise public information can lead to a discontinuous reduction in firm value. Our results give rise to new empirical predictions and have implications for regulation.