Article
Hedge Fund Activism, Corporate Governance, and Firm Performance
Journal of Finance
(2008)
Abstract
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 subse- quent 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.
Disciplines
Publication Date
2008
Citation Information
Frank Partnoy, Alon Brav, Wei Jiang and Randall Thomas. "Hedge Fund Activism, Corporate Governance, and Firm Performance" Journal of Finance Vol. 63 (2008) p. 1729 Available at: http://works.bepress.com/randall-thomas/9/