Abstract
Increasing attention to activist campaigns raises the question of whether they lead to better performance. The impact of different motives, demands, and proposals is still unclear and, sometimes, contradictory. We used a unique dataset of activist campaigns targeting firms in the US from 2002 to 2017 and analysed the impact of activism on firm performance, considering their specific demands. Our results show that firms experience a decline in profitability almost immediately after campaigns, although the effect is unclear in the years subsequent to the intervention. Results also suggest that campaigns primarily focused on demanding a change in strategic direction or obtaining board control intensify the decline in profitability. Seeking board representation is the type of demand that effectively increases target firms’ profitability. Our analysis adds to research on shareholder governance and competitive dynamics by highlighting that the type of demand adopted in campaigns impacts differently on firms’ performance.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
