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|Title:||Capital gains lock-in and governance choices||Authors:||Dimmock, Stephen Geoffrey
Gerken, William C.
Weisbenner, Scott J.
|Issue Date:||2017||Source:||Dimmock, S. G., Gerken, W. C., Ivković, Z., & Weisbenner, S. J. (2018). Capital gains lock-in and governance choices. Journal of Financial Economics, 127(1), 113-135. doi:10.1016/j.jfineco.2017.11.001||Series/Report no.:||Journal of Financial Economics||Abstract:||Differences in accrued gains and investors’ tax-sensitivity induce variation in a capital gains lock-in effect across mutual funds even for the same stock at the same time. Exploiting this variation, we show this effect influences funds’ governance decisions: higher capital gains decrease the likelihood a fund exits prior to contentious votes and increase the likelihood a fund votes against management. Consistent with tax motivation, these findings are concentrated among funds with tax-sensitive investors. Further, high aggregate capital gains across funds holding a stock predict a higher likelihood management loses a vote and a lower likelihood a contentious vote is proposed.||URI:||https://hdl.handle.net/10356/105243
|ISSN:||0304-405X||DOI:||http://dx.doi.org/10.1016/j.jfineco.2017.11.001||Rights:||© 2017 Elsevier B.V. All rights reserved. This paper was published in Journal of Financial Economics and is made available with permission of Elsevier B.V.||Fulltext Permission:||open||Fulltext Availability:||With Fulltext|
|Appears in Collections:||NBS Journal Articles|
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