The long-term valuation effects of voluntary dual class share unifications

Beni Lauterbach, Anete Pajuste

Research output: Contribution to journalArticlepeer-review

17 Scopus citations


We study 121 voluntary dual class share unification in Europe during 1996-2009, and uncover evidence suggesting a positive valuation response to governance improvements and a negative valuation response to possible financial tunneling. Corporate governance improvement is attained by abolishing the wedge between ownership and voting rights and by significantly decreasing controlling shareholders' voting power. Financial tunneling is suspected when some controlling shareholders use the unification hype to sell part or all of their holdings at inflated prices. On average, the corporate governance positive valuation effects prevail, and voluntary unifications are accompanied by a statistically and economically significant increase of Tobin's Q.

Original languageEnglish
Pages (from-to)171-185
Number of pages15
JournalJournal of Corporate Finance
StatePublished - 1 Apr 2015

Bibliographical note

Publisher Copyright:
© 2015 Elsevier B.V.


  • Corporate governance improvements
  • Dual class shares
  • Financial tunneling


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