Using a large hand-collected data set from 2001 to 2006, we find that activist hedge funds in the United States propose strategic, operational, and financial remedies and attain success or partial success in two-thirds of the cases. Hedge funds seldom seek control and in most cases are nonconfrontational. The abnormal return around the announcement of activism is approximately 7%, with no reversal during the subsequent year. Target firms experience increases in payout, operating performance, and higher CEO turnover after activism. Our analysis provides important new evidence on the mechanisms and effects of informed shareholder monitoring.ALTHOUGH HEDGE FUND ACTIVISM IS WIDELY discussed and fundamentally important, it remains poorly understood. Much of the commentary on hedge fund activism is based on supposition or anecdotal evidence. Critics and regulators question whether hedge fund activism benefits shareholders, while numerous commentators claim that hedge fund activists destroy value by distracting managers from long-term projects. However, there is a dearth of large-sample evidence about hedge fund activism, and existing samples are plagued by various biases. * We thank the Acting Editor who handled our submission. Brav is with Duke University, Jiang is with Columbia University, Partnoy is with University of San Diego, and Thomas is with Vanderbilt University. The authors have benefited from discussions with Patrick Bolton, Bill Bratton, Martijn Cremers, Gregory Dyra, Alex Edmans, Allen Ferrell, Gur Huberman, Joe Mason, Edward Rock, Mark Roe, Roberta Romano, Tano Santos, William Spitz, Robert Thompson, and Gregory van Inwegen and comments from seminar and conference participants at the American Law and Economics Association, Arizona State University, Association of American Law Schools, BNP Paribas Hedge Fund Centre Symposium, Chicago Quantitative Alliance, Columbia University, The Conference Board, Drexel University, Duke University, FDIC, University of Florida, Goldman Sachs Asset Management, Hong Kong University of Science and Technology, Interdisciplinary Center (Herzlyia, Israel), Inquire (UK), University of Kansas, London Business School, Nanyang Technological University, National University of Singapore, Singapore Management University, Society of Quantitative Analysts, University of Amsterdam, U.S. Securities and Exchange Commission, University of Texas at Austin, University of Virginia, University of Washington, Washington University in St. Louis, Wharton, the European Financial Management Association annual meeting in Vienna, and the Vanderbilt Investor Activism Conference. We owe special thanks to a large number of research assistants for their help in data collection and, in particular, to Jennifer Blessing, Amod Gautam, Greg Klochkoff, and Samantha Prouty. We also thank George Murillo for excellent research assistance. Brav and Jiang acknowledge the financial support from the FDIC, the Q-Group, and the Yale/Oxford Shareholders and Corporate Governance Research Agenda. Jiang is also th...
Cotton plants were grown in CO2‐controlled growth chambers in atmospheres of either 35 or 65 Pa CO2. A widely accepted model of C3 leaf photosynthesis was parameterized for leaves from both CO2 treatments using non‐linear least squares regression techniques, but in order to achieve reasonable fits, it was necessary to include a phosphate limitation resulting from inadequate triose phosphate utilization. Despite the accumulation of large amounts of starch (>50 g m−2) in the high CO2 plants, the photosynthetic characteristics of leaves in both treatments were similar, although the maximum rate of Rubisco activity (Vcmax), estimated from A versus Ci response curves measured at 29°C, was ∼10% lower in leaves from plants grown in high CO2. The relationship between key model parameters and total leaf N was linear, the only difference between CO2 treatments being a slight reduction in the slope of the line relating Vcmax to leaf N in plants grown at high CO2. Stomatal conductance of leaves of plants grown and measured at 65 Pa CO2 was approximately 32% lower than that of plants grown and measured at 35 Pa. Because photosynthetic capacity of leaves grown in high CO2 was only slightly less than that of leaves grown in 35 Pa CO2, net photosynthesis measured at the growth CO2, light and temperature conditions was approximately 25% greater in leaves of plants grown in high CO2, despite the reduction in leaf conductance. Greater assimilation rate was one factor allowing plants grown in high CO2 to incorporate 30% more biomass during the first 36 d of growth.
Carbon-use efficiency (CUE), the ratio of net primary production (NPP) to gross primary production (GPP), describes the capacity of forests to transfer carbon (C) from the atmosphere to terrestrial biomass. It is widely assumed in many landscape-scale carbon-cycling models that CUE for forests is a constant value of $ 0.5. To achieve a constant CUE, tree respiration must be a constant fraction of canopy photosynthesis. We conducted a literature survey to test the hypothesis that CUE is constant and universal among forest ecosystems. Of the 60 data points obtained from 26 papers published since 1975, more than half reported values of GPP that were not estimated independently from NPP; values of CUE calculated from independent estimates of GPP were greater than those calculated from estimates of GPP derived from NPP. The slope of the relationship between NPP and GPP for all forests was 0.53, but values of CUE varied from 0.23 to 0.83 for different forest types. CUE decreased with increasing age, and a substantial portion of the variation among forest types was caused by differences in stand age. When corrected for age the mean value of CUE was greatest for temperate deciduous forests and lowest for boreal forests. CUE also increased as the ratio of leaf mass-to-total mass increased. Contrary to the assumption of constancy, substantial variation in CUE has been reported in the literature. It may be inappropriate to assume that respiration is a constant fraction of GPP as adhering to this assumption may contribute to incorrect estimates of C cycles. A 20% error in current estimates of CUE used in landscape models (i.e. ranging from 0.4 to 0.6) could misrepresent an amount of C equal to total anthropogenic emissions of CO 2 when scaled to the terrestrial biosphere.
The concentration of atmospheric carbon dioxide was increased by 200 microliters per liter in a forest plantation, where competition between organisms, resource limitations, and environmental stresses may modulate biotic responses. After 2 years the growth rate of the dominant pine trees increased by about 26 percent relative to trees under ambient conditions. Carbon dioxide enrichment also increased litterfall and fine-root increment. These changes increased the total net primary production by 25 percent. Such an increase in forest net primary production globally would fix about 50 percent of the anthropogenic carbon dioxide projected to be released into the atmosphere in the year 2050. The response of this young, rapidly growing forest to carbon dioxide may represent the upper limit for forest carbon sequestration.
Interactive effects of root restriction and atmospheric CO2 enrichment on plant growth, photosynthetic capacity, and carbohydrate partitioning were studied in cotton seedlings (Gossypium hirsutum L.) grown for 28 days in three atmospheric CO2 partial pressures (270, 350, and Elevated atmospheric CO2 affects plant growth primarily by increasing net photosynthetic rates through an increase in CO2 partial pressure at the site of fixation in the chloroplast (26). Responses of plants to long-term exposure of elevated C02, however, are not well understood. Net photosynthesis of some species after long-term exposure (weeks, months) to elevated CO2 is often lower than net photosynthesis after short-term exposure (days, hours) (6,8,22,23,25,28,29 When photosynthesis was measured at 1000 ,ubar CO2 in Desmodium paniculatum after growth in 1000 Mbar CO2 for 3 to 7 weeks, rates were 33% lower relative to plants grown in 350 Mbar (29). After 3 weeks of growth in 680 Htbar C02, net photosynthetic rates of Eriophorum vaginatum measured at 680 ,ubar decreased 61% relative to plants grown at 340 pbar (25). Reduced photosynthetic capacity in elevated CO2 has been found in cotton growing in pots under nitrogenlimited conditions and under conditions of nonlimiting nitrogen (6, 28). On the other hand, cotton plants grown under field conditions at elevated CO2 maintained higher photosynthetic capacity compared to plants growing at ambient CO2 levels (2 1).It has been established that stomatal conductance of C3 plants typically decreases at elevated CO2 concentrations ( 14).Studies aimed at separating stomatal and biochemical limitations of photosynthesis, however, have concluded that stomatal closure was not responsible for reductions in photosynthetic rates of plants grown under long-term CO2 enrichment (6,8,30). Efforts to understand the physiological nature of the photosynthetic decline in plants exposed to long-term elevated CO2 have focused on chloroplast damage due to excessive carbohydrate accumulation (6, 29), on feedback inhibition associated with low utilization of photosynthate (6,8,22,23), and on changes in Rubisco activity (20,22,30). Starch often accumulates in chloroplasts in response to longterm elevated CO2 (3,6,29). This increase in nonstructural carbohydrate indicates that the plant cannot use photosynthate at the rate at which it is being produced and, when correlated with decreased net photosynthesis, reflects possible feedback effects on the photosynthetic process (1,11,15
Forest trees are major components of the terrestrial biome and their response to rising atmospheric CO2 plays a prominent role in the global carbon cycle. In this study, loblolly pine seedlings were planted in the field in recently disturbed soil of high fertility, and CO2 partial pressures were maintained at ambient CO2 (Amb) and elevated CO2 (Amb + 30 Pa) for 4 years. The objective of the study was to measure seasonal and long-term responses in growth and photosynthesis of loblolly pine exposed to elevated CO2 under ambient field conditions of precipitation, light, temperature and nutrient availability. Loblolly pine trees grown in elevated CO2 produced 90% more biomass after four growing seasons than did trees grown in ambient CO2. This large increase in final biomass was primarily due to a 217% increase in leaf area in the first growing season which resulted in much higher relative growth rates for trees grown in elevated CO2. Although there was not a sustained effect of elevated CO2 on relative growth rate after the first growing season, absolute production of biomass continued to increase each year in trees grown in elevated CO2 as a consequence of the compound interest effect of increased leaf area on the production of more new leaf area and more biomass. Allometric analyses of biomass allocation patterns demonstrated size-dependent shifts in allocation, but no direct effects of elevated CO2 on partitioning of biomass. Leaf photosynthetic rates were always higher in trees grown in elevated CO2, but these difterences were greater in the summer (60-130% increase) than in the winter (14-44% increase), refiecting strong seasonal effects of temperature on photosynthesis. Our results suggest that seasonal variation in the relative photosynthetic response to elevated CO2 will occur in natural ecosystems, but total non-structural carbohydrate (TNC) levels in leaves indicate that this variation may not always be related to sink activity. Despite indications of canopy-level adjustments in carbon assimilation, enhanced levels of leaf photosynthesis coupled with increased total leaf area indicate that net carbon assimilation for the whole tree was greater for trees grown under elevated CO2 compared with ambient CO2. If the large growth enhancement observed in loblolly pine were maintained after canopy closure, then
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.