Working Paper: CEPR ID: DP18233
Authors: Josef Bajzik; Tomas Havranek; Zuzana Irsova; Jiri Novak
Abstract: We conduct a meta-analysis of 1,973 estimates of stock price responses to shareholder activism reported in 67 primary studies. We document publication bias in the literature. Corrected activism effects range from 0% to 1.5%. Effects are stronger when shareholder rights are better protected and when stock markets are smaller. Markets respond more positively to activism by individual investors, confrontational activism, and activism aimed at company sale. Estimates based on longer periods, simpler risk-adjustment approaches, more recent and longer datasets, as well as those published in more reputable journals tend to be larger.
Keywords: shareholder activism; price response; value created; meta analysis; publication bias
JEL Codes: G14; G30; G34; L20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| shareholder activism (G34) | firm value (G32) |
| better protection of shareholder rights (G38) | price responses to activism (P22) |
| smaller stock markets (G10) | price responses to activism (P22) |
| individual investors activism (G24) | positive market response (G10) |
| confrontational activism (D74) | positive market response (G10) |
| activism aimed at company sales (L21) | positive market response (G10) |
| publication bias (C46) | perceived effectiveness of shareholder activism (G34) |