The Dynamic Trade-Off of Dual-Class Shares

Abstract

Dual-class shares allocate control to founders whose firm-specific investments drive firm value but separate control from ownership, raising agency costs. We analyze this trade-off dynamically. Using new data on US dual-class firms spanning 52 years and difference-in-differences designs, we show that valuations rise following dual-class recapitalizations but decline over time, whereas innovative output increases persistently. These effects are concentrated in industries with greater firm-specific investments. We find corresponding results for stock unifications. Investment by mature dual-class firms is less sensitive to opportunities and voting premia increase with maturity. Our results support dynamic treatment effects and yield new policy implications.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 29 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.