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http://ssrn.com/abstract=1735797
 
 

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Activism of Institutional Investors, Corporate Governance Alerts and Financial Performance


Jean-Michel Sahut


IPAG Business School

Jean-Sebastien Lantz


Ecole Nationale Superieure des Telecommunications

Sophie Montandrau


IAE of Aix en Provence

January 6, 2011

International Journal of Business, Vol. 15, No. 2, 2010

Abstract:     
Institutional investors are predominant on the financial markets and are becoming more active in their portfolio management. This article attempts to enhance our understanding of the incidence of shareholder activism on market reaction in the wake of several previous American studies.

Since 1999, SBF120 companies in France that do not respect the "Code of Best Practices on Corporate Governance as set out by the AFG" are added to a widely circulated "target list." The aim of this article is to examine the impact of the activism of institutional investors on shareholder wealth in France. Our empirical study examines the AFG alerts on financial performance, using a short-term event study methodology.

Our findings indicate a negative effect on the wealth of shareholders on the day of the alert. These results lead us to believe that the impact depends on past performance measured by book ratios or expressed in relation to the future premium opportunity for shareholders.

Number of Pages in PDF File: 22

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Date posted: January 7, 2011  

Suggested Citation

Sahut, Jean-Michel and Lantz, Jean-Sebastien and Montandrau, Sophie, Activism of Institutional Investors, Corporate Governance Alerts and Financial Performance (January 6, 2011). International Journal of Business, Vol. 15, No. 2, 2010. Available at SSRN: http://ssrn.com/abstract=1735797

Contact Information

Jean-Michel Sahut (Contact Author)
IPAG Business School ( email )
184 BD Saint Germain
Paris, 75006
France
Jean-Sebastien Lantz
Ecole Nationale Superieure des Telecommunications ( email )
46, rue Barrault
Paris Cedex 13, F-75634
France
Sophie Montandrau
IAE of Aix en Provence ( email )
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