Essays on Financial Market Structure and Shareholder Voting

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dc.contributor.advisorBack, Kerryen_US
dc.creatorBlonien, Patricken_US
dc.date.accessioned2025-01-16T20:54:27Zen_US
dc.date.available2025-01-16T20:54:27Zen_US
dc.date.created2024-12en_US
dc.date.issued2024-12-06en_US
dc.date.submittedDecember 2024en_US
dc.date.updated2025-01-16T20:54:27Zen_US
dc.description.abstractChapter 1: Size Discovery in Slow Markets Adding a size-discovery trading protocol, where a break in the limit order book occurs to match orders at a fixed price, can increase allocative efficiency in markets with slow trading frequency. A high trading frequency spreads liquidity, resulting in a strong incentive to wait for a size-discovery session. This incentive to delay trade is smaller in slower markets, and its negative effect on efficiency can be offset in slower markets by the positive effect of size discovery. This result rationalizes the empirical fact that size-discovery protocols only exist in slower markets. Potential conflicts of interest between traders and platform operators are identified but seem unlikely to drive the existence of size-discovery trading protocols. Chapter 2: Is 24/7 Trading Better? with Alexander Ober Are daily market closures still needed? In a model of large traders who manage inventory risk, we show that even short market closures can significantly improve liquidity. Anticipating these closures, traders engage in aggressive trading, which concentrates and coordinates liquidity. A market structure with a daily closure improves allocative efficiency relative to a continuously open market, even though traders cannot trade during the closure itself. If traders have heterogeneous information about the asset value, trade is less aggressive on the whole, but closure still retains its substantial welfare benefits. Our findings suggest moving to a longer trading day could be beneficial, but moving to 24/7 trading would harm welfare. Chapter 3: Proxy Advice and Errors in Shareholder Voting with Alan Crane, Kevin Crotty, and David De Angelis How does proxy advice relate to voting mistakes? Structural estimates of latent proposal quality imply advisor ISS’s recommendations are wrong half the time for shareholder proposals. Vote outcomes, however, are correct the vast majority of the time because positive recommendations, which are particularly uninformative, are less influential. Our results support recent theory that proxy advice crowds out information collection by institutional investors and aims to create controversy. Recommendations are less informative than most mutual funds' votes. Vanguard’s votes are a considerably better benchmark for proposal quality than ISS recommendations. Overall, our analysis implies limiting ISS’s influence would improve voting outcomes.en_US
dc.format.mimetypeapplication/pdfen_US
dc.identifier.urihttps://hdl.handle.net/1911/118199en_US
dc.language.isoenen_US
dc.subjectMarket Designen_US
dc.subjectImperfect Competitionen_US
dc.subjectLiquidityen_US
dc.subjectMarket Microstructureen_US
dc.subjectVotingen_US
dc.subjectStructural Modelen_US
dc.titleEssays on Financial Market Structure and Shareholder Votingen_US
dc.typeThesisen_US
dc.type.materialTexten_US
thesis.degree.departmentBusinessen_US
thesis.degree.disciplineFinanceen_US
thesis.degree.grantorRice Universityen_US
thesis.degree.levelDoctoralen_US
thesis.degree.nameDoctor of Philosophyen_US
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