Shareholders versus Stakeholders in Investor Activism: Value for Whom?

50 Pages Posted: 25 Jan 2021

See all articles by Hadiye Aslan

Hadiye Aslan

Georgia State University - Department of Finance

Date Written: 2020

Abstract

Is reduction in supplier costs a significant channel for value creation by activist investors? Using a comprehensive sample of shareholder activism during 1994-2015, and addressing endogeneity concerns, we find significant economics effects on the profits and capital investment of the target's suppliers after intervention. Consistent with the predictions of the incomplete contracting and bargaining literatures, factors that weaken (strengthen) the bargaining power of suppliers relative to targets amplify (dilute) the spillover effects on suppliers. The results are robust to the alternative hypotheses of latent industry effects on suppliers and stock picking by activist investors.

Keywords: Shareholder activism, Supply chain, Incomplete contracts, Bargaining

Suggested Citation

Aslan, Hadiye, Shareholders versus Stakeholders in Investor Activism: Value for Whom? (2020). Journal of Corporate Finance, Vol. 60, 2020, Available at SSRN: https://ssrn.com/abstract=3686989

Hadiye Aslan (Contact Author)

Georgia State University - Department of Finance ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
32
Abstract Views
196
PlumX Metrics