FACTORS AFFECTING THE VALUE OF THE STOCK VOTING RIGHT - EVIDENCE FROMTHE SWISS EQUITY MARKET

Switzerland offers a natural setting for investigating factors that af fect the value of voting rights, because many Swiss firms have multipl e classes of shares with different voting rights. Relatively poor shar eholder protection in Switzerland leads to high private benefits for t he controlling shareholder of a company. The value of a voting right a s a monitoring device is therefore higher than in the United States. S hares that are more liquid, have superior voting rights, or lack restr ictions on transferability trade at significantly higher prices. Conve rsely, voting rights of companies that are controlled by one single en tity show a significant discount.