Impact of Shareholders’ Activism on the Performance of Banks in India: A Panel Data Application

Abstract

There is a widespread uncertainty regarding the usefulness of shareholder activism (SA) as a part of corporate governance for firms and banks. SA has wide acceptance across the board among all the stakeholders’ participation. Since banks are the backbone of any economy, any endeavor (support to SA) creating difficulty may boomerang. Such actions do more harm than good; therefore, it is imperative to determine whether SA is beneficial to the banks or not. In this study, the SA index is built for Indian banks. The data relating to bank performance and valuation is gathered for 2016–2019. Panel data econometrics is applied to determine the impact of SA on banks performance. Results reveal that SA impacts bank performance. Furthermore, transparency and disclosure significantly moderates the association of SA with the performance. However, SA is not impacting bank valuation. It is a unique study of its kind to provide insights on SA for the banking sector.

Impact of financial distress on the dividend policy of banks in India: evidence using panel data

“…Therefore, it offers more significant variability and a higher amount of information. Many researchers use panel data analysis techniques in their respective studies [32,47,16,15,19,55,39,10,61];…”