IDEAS home Printed from https://ideas.repec.org/a/cup/jfinqa/v38y2003i02p317-336_00.html
   My bibliography  Save this article

Does Coordinated Institutional Investor Activism Reverse the Fortunes of Underperforming Firms?

Author

Listed:
  • Song, Wei-Ling
  • Szewczyk, Samuel H.

Abstract

We investigate the impact of Focus Listing by the Council of Institutional Investors on targeting poorly performing firms. Post-listing stock returns for the targeted firms differ insignificantly from those of a suitable benchmark group. Institutional investors increase their holdings of targeted firms, but not by more than those of the benchmark firms. Similarly, though analysts revise earnings forecasts up for Focus Listed firms, they do so well after the listing event and positive revisions are no greater than the benchmark group. Moreover, there appears to be little difference between Focus List and benchmark firms in the incidence of post-listing events such as mergers and stock repurchases. Overall, we find very little evidence of the efficacy of shareholder activism.

Suggested Citation

  • Song, Wei-Ling & Szewczyk, Samuel H., 2003. "Does Coordinated Institutional Investor Activism Reverse the Fortunes of Underperforming Firms?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(2), pages 317-336, June.
    • Handle: RePEc:cup:jfinqa:v:38:y:2003:i:02:p:317-336_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022109000001630/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bethel, Jennifer E. & Hu, Gang & Wang, Qinghai, 2009. "The market for shareholder voting rights around mergers and acquisitions: Evidence from institutional daily trading and voting," Journal of Corporate Finance, Elsevier, vol. 15(1), pages 129-145, February.
    2. Josef Bajzik, 2023. "Does Shareholder Activism Have a Long-Lasting Impact on Company Value? A Meta-Analysis," Working Papers 2023/10, Czech National Bank.
    3. Erenburg, Grigori & Smith, Janet Kiholm & Smith, Richard, 2016. "Which institutional investors matter for firm survival and performance?," The North American Journal of Economics and Finance, Elsevier, vol. 37(C), pages 348-373.
    4. Havranek, Tomas & Bajzík, Josef & Irsova, Zuzana & Novak, Jiri, 2023. "Does Shareholder Activism Create Value? A Meta-Analysis," CEPR Discussion Papers 18233, C.E.P.R. Discussion Papers.
    5. Matt Wegener & Fayez A. Elayan & Sandra Felton & Jingyu Li, 2013. "Factors Influencing Corporate Environmental Disclosures," Accounting Perspectives, John Wiley & Sons, vol. 12(1), pages 53-73, March.
    6. Chii-Shyan Kuo & Chandra Subramaniam & Xu Wang & Shih-Ti Yu, 2020. "Adoption of performance-vested equity incentives under investor pressure: window dressing or taking the window of opportunity?," Review of Quantitative Finance and Accounting, Springer, vol. 54(2), pages 565-587, February.
    7. Lily Qiu & Hong Wan, 2006. "Selection or Influence? Institutional Investors and Acquisition Targets," Working Papers 2006-25, Brown University, Department of Economics.
    8. Denes, Matthew R. & Karpoff, Jonathan M. & McWilliams, Victoria B., 2017. "Thirty years of shareholder activism: A survey of empirical research," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 405-424.
    9. Yu Ting Forester Wong, 2020. "Wolves at the Door: A Closer Look at Hedge Fund Activism," Management Science, INFORMS, vol. 66(6), pages 2347-2371, June.
    10. Simon Rafaqat & Sana Rafaqat & Sahil Rafaqat & Saoul Rafaqat & Dawood Rafaqat, 2023. "Shareholder Activism and Firm Performance: A Review," Journal of Economics and Behavioral Studies, AMH International, vol. 14(4), pages 31-41.
    11. Kim, Woochan & Kim, Woojin & Kwon, Kap-Sok, 2009. "Value of outside blockholder activism: Evidence from the switchers," Journal of Corporate Finance, Elsevier, vol. 15(4), pages 505-522, September.
    12. Jackson, Gregory, 2010. "Understanding corporate governance in the United States: An historical and theoretical reassessment," Arbeitspapiere 223, Hans-Böckler-Stiftung, Düsseldorf.
    13. Raluca Roman, 2015. "Shareholder activism in banking," Research Working Paper RWP 15-9, Federal Reserve Bank of Kansas City.
    14. Zhang, Qiyu & Zhang, Xiaoxiang & Chen, Ding & Strange, Roger, 2022. "Market discipline or rent extraction: Impacts of share trading by foreign institutional investors in different corporate governance and investor protection environments," International Review of Financial Analysis, Elsevier, vol. 79(C).
    15. Lily Qiu, 2004. "Which Institutional Investors Monitor? Evidence from Acquisition Activity," Yale School of Management Working Papers amz2497, Yale School of Management, revised 01 Jun 2006.
    16. Martin Gold, 2010. "Fiduciary Finance," Books, Edward Elgar Publishing, number 13813.
    17. Lars Nordén & Therese Strand, 2011. "Shareholder activism among portfolio managers: rational decisions or 15 minutes of fame?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 15(3), pages 375-391, August.
    18. Danny Yeung, 2012. "The Impact of Institutional Ownership: A Study of the Australian Equity Market," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 11, July-Dece.
    19. Grigori Erenburg & Janet Kiholm Smith & Richard Smith, 2015. "Does Institutional Ownership Promote the Transformation of Underperforming Firms?," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-40, December.
    20. Ajaz Ul Islam, 2020. "Do Shareholder Activism Effect Corporate Governance and Related Party Transactions: Evidences from India?," Indian Journal of Corporate Governance, , vol. 13(2), pages 165-189, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jfinqa:v:38:y:2003:i:02:p:317-336_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jfq .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.