Antecedents of Shareholder Activism in Target Firms: Evidence from a Multi-Country Study
Corporate Governance: An International Review, Forthcoming
42 Pages Posted: 1 Oct 2009 Last revised: 12 Oct 2009
Date Written: September 30, 2009
This study seeks to understand target firm specific antecedents of shareholder activism, and how the causal relationships vary depending on the governance environments in a multi-country setting, comprising three common law countries (USA, UK and Australia) and three civil law countries (Japan, Germany & South Korea). Our findings suggest that the antecedents of shareholder activism vary by the motivation of the activist. We identify that activists target firms with two motives, (a) to improve the financial performance, and (b) to improve the social performance of the firm. With respect to the target firm level antecedents, we find that firm size is unrelated to financial activism, but positively related to social activism; ownership concentration is negatively related to both financial and social activism; and prior profitability is negatively related to financial activism, but positively related to social activism. Further, these relationships in the case of financial activism are generally stronger in common law legal systems, whereas those in the case of social activism are generally stronger in environments with a greater level of income inequality.
Keywords: Corporate Governance, Shareholder Activism, Financial Activism, Social Activism
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Corporate Governance and Shareholder Initiatives: Empirical Evidence
By Jonathan M. Karpoff, Paul H. Malatesta, ...
Shareholder Passivity Reexamined
The Impact of Shareholder Activism on Target Companies: A Survey of Empirical Findings
Shareholder Activism and Corporate Governance in the United States
The Motivation and Impact of Pension Fund Activism
Monitoring: Which Institutions Matter?
By Kai Li, Jarrad Harford, ...
Hedge Fund Activism, Corporate Governance, and Firm Performance
Does Coordinated Institutional Activism Work? An Analysis of the Activities of the Council of Institutional Investors
By Tim C. Opler and Jonathan S. Sokobin
The Evolution of Shareholder Activism in the United States
By Stuart Gillan and Laura T. Starks
The Case for Increasing Shareholder Power