Security-voting structure and equity financing in the banking sector: ‘one head-one vote’ versus ‘one share-one vote’

  • Riccardo FerrettiEmail author
  • Pierpaolo Pattitoni
  • Alex Castelli


Using a unique dataset including all rights issues of new shares and other equity-like securities announced by Italian listed banks between 1989 and 2014, and exploiting the ideal setting provided by the Italian Banking Law, which allows for listed co-operative banks, we test if the ‘one head-one vote’ principle of co-operative banks and the ‘one share-one vote’ voting system of joint stock banks imply different costs of equity. Our empirical results, obtained using an event-study methodology, regressions and matching estimators, support our research hypothesis that the one head-one vote principle makes it more difficult raising new capital compared to one share-one vote principle, and contribute to the literature on demutualization and cooperative hybrids.


Agency costs Banks Corporate governance Corporate control Seasoned Equity Offering 

JEL Classification

G21 G32 



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Authors and Affiliations

  1. 1.Department of Communication and Economics, Cefin (Centro Studi Banca e Finanza)University of Modena and Reggio EmiliaReggio EmiliaItaly
  2. 2.Department of Statistical Sciences “Paolo Fortunati”University of BolognaBolognaItaly
  3. 3.Cefin (Centro Studi Banca e Finanza)Reggio EmiliaItaly
  4. 4.Henley Business School, Business Informatics, Systems and AccountingUniversity of ReadingWhiteknights, ReadingUK

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