K.J. Martjin Cremers

Marijn Cremers, University of Notre Dame Mendoza College of Business, LAMB Faculty Fellow

K.J. Martjin Cremers
Professor of Finance Mendoza College of Business
LAMB Faculty Fellow



Spotlight Research: Thirty Years of Shareholder Rights and Firm Valuation

Martijn Cremers and Allen Ferrell, Thirty Years of Shareholder Rights and Firm Valuation, Journal of Finance (forthcoming 2014).
This paper explores the relationship between shareholder rights and firm valuation.

This research introduces a new hand-collected dataset that tracked restrictions on shareholder rights at approximately 1,000 firms from 1978-1989. In conjunction with 1990-2006 IRRC data, the authors tracked firms’ shareholder rights over thirty years. Most governance changes occurred during the 1980s. The data found a robustly negative association between restrictions on shareholder rights (using the G-Index as a proxy) and Tobin’s Q. The negative association only appears after the judicial approval of antitakeover defenses in the 1985 landmark Delaware Supreme Court decision of Moran v. Household. This decision was an unanticipated, exogenous shock that increased the importance of shareholder rights.

Other Research