Soft Activism and Corporate Dividend Policy: Evidence from Institutional Investors Site Visits

55 Pages Posted: 6 Mar 2019 Last revised: 2 Jan 2021

See all articles by Xiaping Cao

Xiaping Cao

SUN YAT-SEN UNIVERSITY

Hanyang (Hans) Wang

Peking University - School of Economics

Sili Zhou

Fudan University - Fanhai International School of Finance (FISF)

Date Written: December 1, 2020

Abstract

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

Cao, Xiaping and Wang, Hanyang (Hans) and Zhou, Sili, Soft Activism and Corporate Dividend Policy: Evidence from Institutional Investors Site Visits (December 1, 2020). Available at SSRN: https://ssrn.com/abstract=3326544

Xiaping Cao

SUN YAT-SEN UNIVERSITY ( email )

135 Xingang Xi Road
Guangzhou, 510275
China
+862084111154 (Phone)

Hanyang (Hans) Wang

Peking University - School of Economics ( email )

Beijing
China

Sili Zhou (Contact Author)

Fudan University - Fanhai International School of Finance (FISF) ( email )

220 Handan Road
Shanghai, 200433
China

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