Importing Activists: Determinants and Consequences of Increased Cross-border Shareholder Activism

78 Pages Posted: 29 Dec 2020 Last revised: 15 Jul 2022

See all articles by Mark G. Maffett

Mark G. Maffett

University of Miami - Department of Accounting

Anya Nakhmurina

Yale School of Management

Douglas J. Skinner

The University of Chicago - Booth School of Business

Date Written: July 14, 2022

Abstract

We analyze nearly 7,000 shareholder activist campaigns across 56 countries and show that shareholder activism is now a global phenomenon. Our analyses provide evidence on factors that explain the spread of activism and two related questions. First, we measure the extent to which country-level governance regulations facilitate shareholder engagement, a necessary condition for activism, and show that our measure of shareholder-empowering governance regulation explains cross-country variation in the emergence of activism. Second, we show that changes in these regulations also affect outcomes for firms that face a high threat of activism but that are not targeted by activists (i.e., there are spillovers)—including increased profitability, higher payouts, and reduced investment. These effects are most pronounced in countries with weak minority shareholder rights, where activism had previously been relatively unimportant.

Keywords: Shareholder Activism, Corporate Governance, Regulation, Real Effects

JEL Classification: F55, G38, K22, M48

Suggested Citation

Maffett, Mark G. and Nakhmurina, Anya and Skinner, Douglas J., Importing Activists: Determinants and Consequences of Increased Cross-border Shareholder Activism (July 14, 2022). Available at SSRN: https://ssrn.com/abstract=3721680 or http://dx.doi.org/10.2139/ssrn.3721680

Mark G. Maffett (Contact Author)

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States

Anya Nakhmurina

Yale School of Management ( email )

165 Whitney Ave
New Haven, CT 06511
United States

Douglas J. Skinner

The University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7137 (Phone)

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