Soft Activism and Corporate Dividend Policy: Evidence from Institutional Investors Site Visits
55 Pages Posted: 6 Mar 2019 Last revised: 2 Jan 2021
Date Written: December 1, 2020
Site visits, acting as a form of soft activism, help discipline firm management by increasing cash dividend ex post. The casual link is built by using both Difference-in-Difference and instrumental variable approaches. The effect of site visits works through the channel of threat of exit. Moreover, site visits discipline through active enagement resulting in more participating shareholders and dividend-related proposals in upcoming shareholder meetings. The paper highlights the role of soft activism in a weak institutional environment.
Keywords: Site visits; Dividend pay; Soft activism; Weak institutions
JEL Classification: G34; G35
Suggested Citation: Suggested Citation