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

78 Pages Posted: 29 Dec 2020 Last revised: 23 Mar 2022

See all articles by Mark G. Maffett

Mark G. Maffett

University of Chicago - Booth School of Business

Anya Nakhmurina

Yale School of Management

Douglas J. Skinner

The University of Chicago - Booth School of Business

Date Written: March 19, 2022

Abstract

We analyze nearly 7,000 activist shareholder campaigns across 56 countries and show that shareholder activism is now a global phenomenon. Our analyses provide evidence on the factors that explain the spread of activism and on two related questions. First, we measure the extent to which a country’s governance regulations facilitate shareholder engagement, a necessary condition for activism, and show that our measure of shareholder-empowering corporate governance regulation explains cross-country variation in the emergence of activism. Second, we show that for firms facing a high threat of activism but not yet targeted by an activist campaign, changes in these regulations affect corporate outcomes (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 (March 19, 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 Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
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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