Analyzing the determinants of the voting behavior using a genetic algorithm

• Marcos Vizcaíno-González ^[1] ; Juan Pineiro-Chousa ^[2] ; M. Ángeles López-Cabarcos ^[2]
  1. [1] Universidade da Coruña

     Universidade da Coruña

     A Coruña, España

     
  2. [2] Universidade de Santiago de Compostela

     Universidade de Santiago de Compostela

     Santiago de Compostela, España

     
• Localización: European Research on Management and Business Economics, ISSN 2444-8834, Vol. 22, Nº. 3, 2016, págs. 162-166
• Idioma: inglés
• DOI: 10.1016/j.iedee.2015.11.002
• Enlaces
  • Texto completo (pdf)
• Resumen

  • Using data about votes emitted by funds in meetings held by United States banks from 2003 to 2013, we apply a genetic algorithm to a set of financial variables in order to detect the determinants of the vote direction. Our findings indicate that there are three main explanatory factors: the market value of the firm, the shareholder activism measured as the total number of funds voting, and the temporal context, which reflects the influence of recent critical events affecting the banking industry, including bankruptcies, reputational failures, and mergers and acquisitions. As a result, considering that voting behavior has been empirically linked to reputational harms, these findings can be considered as a useful insight about the keys that should be taken into account in order to achieve an effective reputational risk management strategy.

• Referencias bibliográficas
  • Ahmed, Z., Zeeshan, S., Applying WEKA towards machine learning with genetic algorithm and back-propagation neural networks. Journal of Data...
  • Allen, F., Santomero, A.M., What do financial intermediaries do?. Journal of Banking & Finance 25:2 (2001), 271–294.
  • Allen, F., Santomero, A.M., The theory of financial intermediation. Journal of Banking & Finance 21:11 (1997), 1461–1485.
  • Bebchuk, L., Cohen, A., Firms’ decisions. Where to incorporate. Journal of Law and Economics 46:2 (2002), 383–425.
  • Becker, B., Bergstresser, D., Subramanian, G., Does shareholder proxy access improve firm value? Evidence from the business roundtable challenge....
  • Berger, A.N., Kashyap, A.K., Scalise, J.M., Gertler, M., Friedman, B.M., The transformation of the US banking industry: What a long, strange...
  • Bernile, G., Jarrell, G.A., The impact of the options backdating scandal on shareholders. Journal of Accounting and Economics 47:1 (2009),...
  • Bhattacharya, S., Thakor, A.V., Contemporary banking theory. Journal of Financial Intermediation 3:1 (1993), 2–50.
  • Burns, N., Minnick, K., Does say on pay matter? Evidence from say on pay proposals in the United States. Financial Review 48:2 (2013), 233–258.
  • Cai, J., Garner, J.L., Walkling, R.A., Electing directors. The Journal of Finance 64:5 (2009), 2389–2421.
  • Calomiris, C.W., US bank deregulation in historical perspective. 2000, Cambridge University Press, Cambridge.
  • Chang, T., Yang, S., Chang, K., Portfolio optimization problems in different risk measures using genetic algorithm. Expert Systems with Applications...
  • Chen, M., Using a hybrid evolution approach to forecast financial failures for Taiwan-listed companies. Quantitative Finance 14:6 (2014),...
  • Choi, S.J., Fisch, J.E., Kahan, M., Director elections and the role of proxy advisors. Southern California Law Review 82 (2008), 8–18.
  • Chung, K.H., Pruitt, S.W., A simple approximation of Tobin's q. Financial Management 23:3 (1994), 70–74.
  • Cuñat, V., Gine, M., Guadalupe, M., Say pays! Shareholder voice and firm performance. Journal of Finance, 2013, 373.
  • Davalos, S., Leng, F., Feroz, E.H., Cao, Z., Designing an if-then rules-based ensemble of heterogeneous bankruptcy classifiers: A genetic...
  • DeAngelo, H., DeAngelo, L., Proxy contests and the governance of publicly held corporations. Journal of Financial Economics 23:1 (1989), 29–59.
  • Dodd, P., Warner, J.B., On corporate governance: A study of proxy contests. Journal of Financial Economics 11:1 (1983), 401–438.
  • Ertimur, Y., Ferri, F., Maber, D.A., Reputation penalties for poor monitoring of executive pay: Evidence from option backdating. Journal of...
  • Ertimur, Y., Ferri, F., Oesch, D., Shareholder votes and proxy advisors: Evidence from say on pay. Journal of Accounting Research 51:5 (2013),...
  • Ferri, F., Maber, D.A., Say on pay votes and CEO compensation: Evidence from the UK. Review of Finance 17:2 (2013), 527–563.
  • Fiordelisi, F., Soana, M., Schwizer, P., The determinants of reputational risk in the banking sector. Journal of Banking & Finance 37:5...
  • Fischer, P.E., Gramlich, J.D., Miller, B.P., White, H.D., Investor perceptions of board performance: Evidence from uncontested director elections....
  • Ghoshal, A.K., Mukherjee, T., Dhar, S., An empirical study in indian share market using neural network and genetic algorithm. Asian Journal...
  • Golberg, D.E., Genetic algorithms in search, optimization, and machine learning. 1989, Addison-Wesley, Reading.
  • Gompers, P.A., Ishii, J.L., Metrick, A., Corporate governance and equity prices. Quarterly Journal of Economics 118:1 (2003), 107–155.
  • Gregory-Smith, I., Main, B.G., Binding votes on executive remuneration. 2013, University of Sheffield Research Paper, United Kingdom.
  • Ha, S., Optimal insurance risk allocation with steepest ascent and genetic algorithms. The Journal of Risk Finance 14:2 (2013), 129–139.
  • Hoogs, B., Kiehl, T., Lacomb, C., Senturk, D., A genetic algorithm approach to detecting temporal patterns indicative of financial statement...
  • Huang, J., Cai, Y., Xu, X., A hybrid genetic algorithm for feature selection wrapper based on mutual information. Pattern Recognition Letters...
  • Jiao, Y., Stakeholder welfare and firm value. Journal of Banking & Finance 34:10 (2010), 2549–2561.
  • Kaplan, S.N., Zingales, L., Do investment-cash flow sensitivities provide useful measures of financing constraints?. The Quarterly Journal...
  • Karimi, F., Dastgir, M., Shariati, M., Index prediction in Tehran stock exchange using hybrid model of artificial neural networks and genetic...
  • Larose, D.T., Discovering knowledge in data: An introduction to data mining. 2014, John Wiley & Sons, Hoboken, NJ.
  • Larose, D.T., Data mining methods and models. 2006, John Wiley & Sons, Hoboken, NJ.
  • Leigh, W., Purvis, R., Ragusa, J.M., Forecasting the NYSE composite index with technical analysis, pattern recognizer, neural network, and...
  • Limentani, R.N., Tresoldi, N., Compliance function in banks and reputational risk. Bancaria 10 (1998), 88–93.
  • Lindenberg, E.B., Ross, S.A., Tobin's q ratio and industrial organization. Journal of Business 54:1 (1981), 1–32.
  • Lounsbury, M., Hirsch, P., Klinkerman, S., Institutional upheaval and performance variation: A theoretical agenda and illustration from the...
  • Marquis, C., Lounsbury, M., Vive la resistance: Consolidation and community-level professional counter-mobilization in US banking. Academy...
  • Mulherin, J.H., Poulsen, A.B., Proxy contests and corporate change: Implications for shareholder wealth. Journal of Financial Economics 47:3...
  • Oh, K.J., Kim, T.Y., Min, S., Using genetic algorithm to support portfolio optimization for index fund management. Expert Systems with Applications...
  • Rozsypal, A., Kubat, M., Selecting representative examples and attributes by a genetic algorithm. Intelligent Data Analysis 7:4 (2003), 291–304.
  • Sharma, B., Thulasiram, R.K., Thulasiraman, P., Computing value-at-risk using genetic algorithm. The Journal of Risk Finance 16:2 (2015),...
  • Shin, K., Lee, Y., A genetic algorithm application in bankruptcy prediction modeling. Expert Systems with Applications 23:3 (2002), 321–328.
  • Vafaie, H., De Jong, K., Genetic algorithms as a tool for feature selection in machine learning. 1992, 200–203.
  • Vasilakis, G.A., Theofilatos, K.A., Georgopoulos, E.F., Karathanasopoulos, A., Likothanassis, S.D., A genetic programming approach for EUR/USD...
  • Wu, C., Tzeng, G., Goo, Y., Fang, W., A real-valued genetic algorithm to optimize the parameters of support vector machine for predicting...
  • Xifra, J., Ordeix, E., Managing reputational risk in an economic downturn: the case of Banco Santander. Public Relations Review 35:4 (2009),...
  • Yahr, M.A., “Say-on-pay” proxies in the banking industry. Journal of Management & Marketing Research 13 (2013), 1–10.
  • Yang, J., Honavar, V., Feature subset selection using a genetic algorithm. Motoda, H., Liu, H., (eds.) Feature Extraction, construction, and...