« Does Mandatory Shareholder Voting Prevent Bad Acquisitions? »

Shareholder voting on corporate acquisitions is controversial. In most countries, acquisition decisions are delegated to boards and shareholder approval is discretionary, which makes existing empirical studies inconclusive. We study the UK setting in which shareholder approval is imposed exogenously via a threshold test that provides strong identification. UK shareholders gained 8 cents per dollar at announcement with mandatory voting or $13.6 billion over 1992–2010 in aggregate; without voting, UK shareholders lost $3 billion. Multidimensional regression discontinuity analysis supports a causal interpretation. The evidence suggests that mandatory voting imposes a binding constraint on acquirer chief executive officers.

Becht, A. Polo, S. Rossi. Does Mandatory Shareholder Voting Prevent Bad Acquisitions? The Review of Financial Studies (2016).

« The Euro – utopia betrayed? »

The euro is not a spontaneous currency but the outcome of a national power balance arising from German reunification. Introduced in 1999, this currency enjoyed a favourable economic climate until the  banking crisis of 2008 and Greek bankruptcy revealed the cracks. The various Member States did not share their public finances, nor did they create a political body designed to bring their economies into line. The euro is no longer driven by a common political momentum because the growth difference between European countries is increasing and prosperity is no longer shared. Today, people of independent means in northern Europe are complaining about negative interest rates while there is suffocating unemployment in the south of Europe under a currency that is too strong. In fact, the euro could scupper itself if the way it is managed is not rethought to produce greater financial solidarity and an increased socio-political understanding among the different Member States.

Colmant, B. L’euro: une utopie trahie. Renaissance du Livre (April 2017, 192 p.).

« Does Islamic banking development favor macroeconomic efficiency? »

This study evaluates whether the development of Islamic banking influences macroeconomic efficiency. Thus, we contribute to the analysis of the relation between Islamic finance and economic growth by applying the stochastic frontier approach to estimate technical efficiency at the country level for a sample of 70 countries. We use a unique hand-collected database that covers Islamic banks worldwide over the period 2000 to 2005, identifying evidence that Islamic banking development favors macroeconomic efficiency. Furthermore, we provide support for a non-linear relation between efficiency and Islamic banking development, which is measured by credit or by deposits. Although increasing the development of Islamic banking enhances efficiency up to a certain point, the expansion of Islamic banking becomes detrimental to efficiency beyond this point.

Gheeraert, L. Weill. Does Islamic banking development favor macroeconomic efficiency? Evidence on the Islamic finance-growth nexus. Economic Modelling (2015, 47, 32–39).


« Art as a Wartime Investment: Conspicuous Consumption and Discretion »

When art became an attractive investment: new evidence on the valuation of artworks in wartime France. According to research by Kim Oosterlinck, the art market in France during the Nazi occupation provided one of the best available investment opportunities. Soon to be published in the Economic Journal, this study uses an original database to recreate an art market price index for the period 1937-1947, showing that in a risk-return framework, gold was the only serious alternative to art.


Oosterlinck, K. Art as a Wartime Investment: Conspicuous Consumption and Discretion. Economic Journal (forthcoming).


« Cross-Ownership: A Device for Management Entrenchment? »

By artificially inflating capital and creating own shares, cross-ownership can be a key device for managerial entrenchment. This article proposes a game-theoretical method to measure the extent of shareholder expropriation through cross-ownership. By properly accounting for cross-ownership linkages, we show how managers can seize indirect voting rights, and so insulate their firms from outside control. Significant examples of cross-ownership are found not only in civil law countries, but also in the US mutual fund industry. We apply our method to Germany’s Allianz Group. This article paves the way to better regulatory appraisal of management entrenchment through cross-ownership.

Levy, A. Szafarz. Cross-Ownership: A Device for Management Entrenchment? Review of Finance (forthcoming).



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