News Release

Chung-Ang University study reveals a higher market valuation of cash holdings of firms adopting electronic voting

When electronic voting is adopted in shareholder meetings, shareholders perceive corporate governance as enhanced, increasing the market value of a firm’s cash holdings

Peer-Reviewed Publication

Chung Ang University

The effect of electronic voting on a firm’s cash holdings


Electronic voting facilitates shareholder participation in shareholder meetings, which shapes a positive perception of the firm’s governance and results in a higher market value of cash holdings.

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Credit: Foto Miki

Firms worldwide are increasingly adopting electronic voting, enabling shareholders to cast their votes online, instead of attending shareholder meetings in-person. Shareholders can enjoy superior accessibility to the meetings with electronic voting, compared to those with traditional and in-person setups. Despite the emerging popularity of electronic voting in recent years, however, there is limited evidence of its impact on governance.

To address this gap in research, Assistant Professor Wonsuk Ha from the School of Business Administration, Chung-Ang University, along with Eugenia Lee from the Department of Business Administration, Sejong University, provide empirical evidence on the benefits of electronic voting by examining its effect on the market value of cash holdings.  Their research was published in Volume 89 of International Review of Financial Analysis in October 2023.

A firm’s cash holdings, in theory, should be valued at their nominal value. However, in the capital markets, they are valued differently depending on investors’ expectations of how they will be used. For instance, investors may assign a lower value to a firm’s cash holdings if they have any concerns about the potential misuse of funds by the management. Conversely, when investors believe the firm to be well-managed and prioritize shareholders’ interest, they attribute a higher value to its cash holdings.

In the present study, the authors suggest that electronic voting enhances shareholders’ perception of corporate governance and increases the market value of a firm's cash holdings. “Electronic voting can contribute to effective corporate governance by easing shareholders’ monitoring and engagement in corporate decisions, which improves the firm’s investment decisions, resulting in increased market valuation of a firm’s cash holdings,” explains Dr. Ha.

Using a sample of 12,207 Korean firm-years from 2015 to 2021, the authors examined how the market valuation of cash holdings differs for firms that adopt electronic voting in shareholder meetings. They exploited a Korean setting, which is best suited for this study because Korean firms are mandated to hold in-person shareholder meetings, with electronic voting being optional. This approach allowed the authors to focus on the effect of electronic voting that increases shareholder accessibility without eliminating the traditional on-site component of shareholder meetings.

The authors found that firms that adopt electronic voting have a greater market value of cash holdings compared to those that did not. This effect is more pronounced for firms with larger free cash flows, suggesting that the governance effect of electronic voting is stronger for firms subject to higher risks of asset misappropriation. This finding reinforces the hypothesis that electronic voting helps mitigate shareholders’ concern on the misuse of cash by management.

Moreover, they found that the impact of electronic voting on the value of cash holdings is more prominent for firms with larger ownership by minority shareholders. This result suggests that electronic voting eases shareholders’ participation in shareholder meetings, which can alleviate potential conflicts between controlling and minority shareholders.

Overall, the study provides evidence pointing to the benefits of electronic voting. However, the study also suggests that the governance effect of electronic voting could be muted if electronic voting fails to increase shareholder participation or if it attracts unsophisticated investors who make suboptimal decisions.

The authors emphasize the need to explore other dimensions to fully understand the advantages and disadvantages of the electronic voting system. Dr. Ha says, “It should be noted that the governance implications observed in this study reflect only one aspect of the benefits and costs associated with the electronic voting system. A complete picture of the system’s advantages and disadvantages will only emerge upon further research on this subject.”

Despite these considerations, the findings from this study undoubtedly offer valuable insights for policymakers looking to adopt electronic voting to encourage shareholders’ participation in shareholder meetings and enhance corporate governance practices.






Authors: Eugenia Y. Lee1 and Wonsuk Ha2,


1Department of Business Administration, Sejong University

2School of Business Administration, Chung-Ang University


About Chung-Ang University

Chung-Ang University is a private comprehensive research university located in Seoul, South Korea. It was started as a kindergarten in 1916 and attained university status in 1953. It is fully accredited by the Ministry of Education of Korea. Chung-Ang University conducts research activities under the slogan of “Justice and Truth.” Its new vision for completing 100 years is “The Global Creative Leader.” Chung-Ang University offers undergraduate, postgraduate, and doctoral programs, which encompass a law school, management program, and medical school; it has 16 undergraduate and graduate schools each. Chung-Ang University’s culture and arts programs are considered the best in Korea.




About Assistant Professor Wonsuk Ha

Wonsuk Ha is an Assistant Professor of Accounting at Chung-Ang Business School, Chung-Ang University. His primary research interest lies in the areas of financial accounting and auditing, including corporate governance, securities class actions, institutional investors, corporate disclosure, auditors’ behavior and incentive, and economic effects of accounting standards and policies. He joined Chung-Ang University in 2021 after receiving a Ph.D. in Business Administration from Seoul National University. Before pursuing an academic career, he had worked as a certified public accountant at Samil PwC.


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