Do Activists Increase Long-Term Shareholder Value? New Evidence that Includes Non-Hedge Fund Activists

Shareholder activists are often accused of having short investment horizons and thus pushing companies to increase their stock prices at the expense of long-term shareholder value (“short-termism”). These accusations have prompted extensive research on interventions by hedge funds. In a survey of thirty years of such research, Denes et al. (2017) nevertheless conclude that the issue is still not settled.

In a recent study, we use a very different sample of activists and targeted firms from prior research to shed new light on this issue. Drawing on several sources of information, we develop a 20-year sample of 4,312 campaigns … Read more