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SECURITIES LENDING AROUND PROXIES: IS THE INCREASE IN LENDING DUE TO PROXY ABUSE OR A RESULT OF DIVIDENDS?
Author(s) -
Moser Shane M.,
Ness Bonnie F. Van,
Ness Robert A. Van
Publication year - 2013
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.2013.12000.x
Subject(s) - proxy (statistics) , dividend , equity (law) , voting , stock (firearms) , business , monetary economics , proxy voting , economics , financial system , financial economics , finance , political science , statistics , mathematics , geography , law , archaeology , politics , group voting ticket
The notion of empty voting, or borrowing shares of stock to vote without an equivalent economic interest, has captured the attention of both the financial press and financial researchers. We investigate the securities lending market around proxy record dates for evidence of proxy abuse. We verify a weak statistical effect for share capture at the proxy. However, after controlling for dividend record dates (when more stock lending activity occurs), incremental equity lending activity at the proxy is indistinguishable from zero.