Value of outside blockholder activism: Evidence from the switchers

Kim, Woochan; Kim, Woojin; Kwon, Kap-Sok

doi:10.1016/j.jcorpfin.2009.04.002

Cited by 31 publications

(14 citation statements)

References 48 publications

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“…In the presence of high foreign ownership, corporate managers may not be able to secure shareholders' approval to adopt anti-takeover measures, thereby lowering the incidents of anti-takeover charter amendments in firms with high foreign ownership. This latter conjecture is consistent with recent papers that document the activist roles played by foreign investors (Kim, Kim, andKwon 2009 andKim, Sung, andWei 2010).…”

Section: Hypothesessupporting

confidence: 91%

Managerial entrenchment of anti-takeover devices: Quasi-experimental evidence from Korea

Hwang¹,

Kim

2012

Pacific-Basin Finance Journal

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With the removal of statute-based anti-takeover provisions during the aftermath of Asian crisis, a significant number of Korean firms started to introduce charter-based measures. In this paper, we make use of this unique situation where firm-level anti-takeover provisions (ATP) vary over time (making firm fixed effects regression feasible) and its amendment requires a shareholder approval (making event study feasible), when investigating the link between ATP and firm performance. Using a sample during 1999-2009, we find that firms with charter-based anti-takeover provisions are smaller in size, have lower inside and foreign ownerships, and upon adoption, experience lower share prices, the extent of which drops with inside ownership. Consistent with the overinvestment hypothesis in Jensen (1986), we also find that these firms increase capital expenditure. Our finding also shows that ATP adoptions are followed by lower profitability and lower dividend payouts. Firms with ATPs also experience greater de-listings after the global financial crisis.

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Section: Hypothesessupporting

confidence: 91%

Managerial entrenchment of anti-takeover devices: Quasi-experimental evidence from Korea

Hwang¹,

Kim

2012

Pacific-Basin Finance Journal

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“…Activists are skilled at picking stocks with improving prospects even if they remain passive shareholders. Similar to Kim, Kim, and Kwon (2009), Brav, Jiang, and Kim (2015), and Aslan and Kumar (2015), we examine the effect of HF activism on underfunding when the HF switches from being passive, 13G filer, to being active, 13D filer. We expect an insignificant effect of HF activism after the switch if our results are merely driven by the stock picking skill as both 13G and 13D indicate the same stock picking skill.…”

Section: Identificationmentioning

confidence: 96%

The Dark Side of Hedge Fund Activism: Evidence from Employee Pension Plans

Agrawal

Lim

2017

SSRN Journal

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“…Pension funds have become increasingly large shareholders; their widespread investment in passive index funds has resulted in difficulties to withdraw from companies with poor ESG standards without experiencing short-term losses. When divestment in underperforming firms is not a financially attractive option, pension funds are better off engaging with firms and trying to influence behaviour in a more responsible direction (Clark, 2000;Hawley and Williams, 2000;Monks, 2001;Kim et al, 2009). This phenomenon, referred to as the universal owner concept (Hawley and Williams, 2000), has become a fundamental change in mindset for some pension funds; the reality is that largely cognitive barriers are still preventing universal owners from exercising their power as responsible investors (Kiernan, 2007).…”

Section: Introductionmentioning

confidence: 99%

Influence strategies in shareholder engagement: a case study of all Swedish national pension funds

Hamilton

Eriksson

2011

Journal of Sustainable Finance & Investment

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Investors spend money and resources trying to reduce the environmental, social and governance risks in companies they own. If unattended, these risks may cause reputational damage not only to the portfolio firm but also to its owner. In this article, we study five Swedish national pension funds and the influence strategies used in shareholder engagement. Knowledge about influence strategies is important because successful shareholder engagements can lead to more sustainable corporate behaviour and a lower risk to the investor. In addition to the traditional power and legitimacy dependencies that have been reported as influential in deciding stakeholder salience, our findings reveal five additional factors useful for determining influence strategies in shareholder engagement. We provide a conceptual model showing how these factors interlink with choices of influence strategies, offering a practical use of this study. Stakeholder theory has been used as our theoretical frame of reference, based on existing influence strategy literature using a stakeholder-firm perspective.

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Value of outside blockholder activism: Evidence from the switchers

Cited by 31 publications

References 48 publications

Managerial entrenchment of anti-takeover devices: Quasi-experimental evidence from Korea

Managerial entrenchment of anti-takeover devices: Quasi-experimental evidence from Korea

The Dark Side of Hedge Fund Activism: Evidence from Employee Pension Plans

Influence strategies in shareholder engagement: a case study of all Swedish national pension funds

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