Essays on distance voting and shareholder activism

• Grant number: 19/26940-6
• Support Opportunities: Scholarships in Brazil - Doctorate (Direct)
• Start date: July 01, 2020
• End date: February 29, 2024
• Field of knowledge: Applied Social Sciences - Administration
• Principal Investigator: Lucas Ayres Barreira de Campos Barros
• Grantee: Luís Antônio Gióia Ettore
• Host Institution: Faculdade de Economia, Administração, Contabilidade e Atuária (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil

Abstract

Shareholder activism regards investors to behave actively when companies make decisions that differ from their interests. Activism, therefore, might be useful to improve corporate governance practices and may be value increasing. The Brazilian Securities Commission (CVM) has been working to provide new regulation in order to induce shareholder participation. One potentially important newly adopted mechanism is the distance voting. I delineate three essays on shareholder activism and distance voting. First, I aim to provide a systematic literature review aiming to synthesize and assess the mechanisms of investor engagement. I argue that engagement strategies enabled by information technology, such as distance voting and social media, may reshape domestic and international activist initiatives in an increasingly interconnected world. Second, I exploit a natural experiment by using the difference in differences strategy to investigate the short-term impact of distance voting on shareholder engagement and on corporate governance among the Brazilian firms listed in the Ibovespa Index in 2017 and 2018. Additional analyses include a Regression Discontinuity Design used as a robustness check. Third, I aim to analyze the impact of distance voting on firm value using a sample of listed firms in Brazil. An event study will be designed to capture abnormal returns around relevant dates related to the development and enactment of the regulatory framework regarding distance voting to understand how investors anticipated the longer-term effects of this regulatory change. (AU)