Trust and monitoring

Lesmeister S, Limbach P, Goergen M (2022)
Journal of Banking & Finance 143: 106587.

Zeitschriftenaufsatz | Veröffentlicht | Englisch
 
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Autor*in
Lesmeister, Simon; Limbach, PeterUniBi ; Goergen, Marc
Abstract / Bemerkung
We show that in countries with more societal trust shareholders cast fewer votes at shareholder meetings and are more supportive of management proposals. This result is confirmed by instrumental variable regressions. It also holds at the U.S.-county level and for voting by U.S. institutional investors. Lower monitoring via voting relates less negatively to future firm performance in high-trust countries, suggesting that managers do not exploit greater discretion when trust is high. We also find a negative relation between trust and bond spreads. Our evidence supports theory arguing that trust substitutes for monitoring and has implications for investors' optimal monitoring effort. (c) 2022 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license ( http://creativecommons.org/licenses/by/4.0/ )
Stichworte
Culture; Monitoring; Shareholder expropriation; Shareholder voting; Societal trust
Erscheinungsjahr
2022
Zeitschriftentitel
Journal of Banking & Finance
Band
143
Art.-Nr.
106587
ISSN
0378-4266
eISSN
1872-6372
Page URI
https://pub.uni-bielefeld.de/record/2964640

Zitieren

Lesmeister S, Limbach P, Goergen M. Trust and monitoring. Journal of Banking & Finance. 2022;143: 106587.
Lesmeister, S., Limbach, P., & Goergen, M. (2022). Trust and monitoring. Journal of Banking & Finance, 143, 106587. https://doi.org/10.1016/j.jbankfin.2022.106587
Lesmeister, S., Limbach, P., and Goergen, M. (2022). Trust and monitoring. Journal of Banking & Finance 143:106587.
Lesmeister, S., Limbach, P., & Goergen, M., 2022. Trust and monitoring. Journal of Banking & Finance, 143: 106587.
S. Lesmeister, P. Limbach, and M. Goergen, “Trust and monitoring”, Journal of Banking & Finance, vol. 143, 2022, : 106587.
Lesmeister, S., Limbach, P., Goergen, M.: Trust and monitoring. Journal of Banking & Finance. 143, : 106587 (2022).
Lesmeister, Simon, Limbach, Peter, and Goergen, Marc. “Trust and monitoring”. Journal of Banking & Finance 143 (2022): 106587.

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