Shareholders' agreements and voting power. Evidence from Italian listed firms

This work provides an empirical investigation of shareholders’ agreements signed in Italy over the last decade. The focus is on the impact of agreements on the voting power (Shapley value) of participants. The evidence shows that agreements produce a remarkable reshuffling of voting power. Two views are confronted. First: agreements allow the largest shareholder to increase his power beyond his own voting rights, exploiting a leverage effect. Second: agreements are a way to share control among a coalition of large shareholders, thus limiting the ability of the first one to extract private benefits of control. The leverage effect seems to prevail at lower levels of ownership concentration, while the shared control view works better at higher levels of ownership concentration. Supermajority rules – a tool to reach a more balanced distribution of power – are more likely to be adopted when the first owner has a larger equity stake.Corporate governance; shareholders’ agreements; large shareholder; voting power; one-share-one-vote.

What Drives U.S. Immigration Policy? Evidence from Congressional Roll Call Votes

Immigration is one of the most hotly debated policy issues in the United States today. Despite marked divergence of opinions within political parties, several important immigration reforms were introduced in the post 1965 era. The purpose of this paper is to systematically analyze the drivers of congressional voting behavior on immigration policy during the period 1970-2006, and in particular, to assess the role of economic factors at the district level. Our findings provide robust evidence that representatives of more skilled labor abundant constituencies are more likely to support an open immigration policy concerning unskilled labor. Thus, a simple factor-proportions-analysis model provides useful insights regarding the policy making process on one of the most controversial facets of globalization.immigration policy, voting, political economy

Choosing electoral rules: theory and evidence from US cities

This paper studies the choice of electoral rules, in particular, the question of minority representation. Majorities tend to disenfranchise minorities through strategic manipulation of electoral rules. With the aim of explaining changes in electoral rules adopted by US cities (particularly in the South), we show why majorities tend to adopt "winner-take-all" city-wide rules (at-large elections) in response to an increase in the size of the minority when the minority they are facing is relatively small. In this case, for the majority it is more effective to leverage on its sheer size instead of risking to concede representation to voters from minority-elected districts. However, as the minority becomes larger (closer to a fifty-fifty split), the possibility of losing the whole city induces the majority to prefer minority votes to be confined in minority-packed districts. Single-member district rules serve this purpose. We show empirical results consistent with these implications of the model

Gains from a Redrawing of Political Boundaries: Evidence from State Reorganization in India

This paper analyzes the impact of a redrawing of political boundaries on voting patterns. It investigates whether secession of states leads to gains in terms of better conformity of the electorate's political preferences with those of the elected representatives. We study these issues in the context of reorganization of states in India. Madhya Pradesh, the biggest state in India before the reorganization, was subdivided into Madhya Pradesh and Chhattisgarh in 2000, the latter accounting for less than one-fourth of the electorate of undivided Madhya Pradesh. Using socio-economic composition and traditional voting patterns, we argue that there were differences in political preferences between Madhya Pradesh and Chhattisgarh. However, in electoral democracies, the amount of transfers that a constituency gets depends crucially on whether the local representative belongs to the ruling party. Under these circumstances, we show in a theoretical context that when it is part of the same state, the smaller region would vote strategically to elect representatives with preferences more closely aligned to those of the bigger region. Once it constitutes a separate state however, this motive would no longer operate. Exploiting detailed data on state elections in Madhya Pradesh and Chhattisgarh in 1993, 1998 and 2003 and a difference-in-differences estimation strategy, we show that these predictions are validated empirically - there is a significant divergence in voting behavior between the two regions in 2003 compared to the pre-reorganization period.Political boundaries, Voting, Redistribution