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Are Estimates of the Impact of Shareholder Activism Published Selectively?

Author

Listed:
  • Josef Bajzik

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University & Czech National Bank, Prague, Czech Republic)

  • Tomas Havranek

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Centre for Economic Policy Research, London)

  • Zuzana Irsova

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Anglo-American University, Prague)

  • Jiri Novak

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)

Abstract

Shareholder activism constitutes an increasingly prominent feature of corporate governance landscape. There is a controversy in prior research over whether and how much value activism creates. We examine whether estimates of the impact of shareholder activism are published selectively in prior empirical research. We argue that economists may tend to view activism as a vital corporate governance tool to overcome agency problems and promote economic efficiency. Researchers and journal editors may thus be biased towards consider empirical results in support of the beneficial role of shareholder activism as more reliable than insignificant or opposite results. Consistent with this prediction we document a substantial bias towards publishing (i) higher (rather than lower) and (ii) statistically significant (rather than insignificant) estimates of the impact of shareholder activism. Due to that the pool of estimates in prior empirical literature is biased upwards. The value created by the various forms of shareholder activism corrected for these biases ranges from 0.38 to 3.23% with a median value of 1.94%.

Suggested Citation

  • Josef Bajzik & Tomas Havranek & Zuzana Irsova & Jiri Novak, 2023. "Are Estimates of the Impact of Shareholder Activism Published Selectively?," Working Papers IES 2023/1, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jan 2023.
    • Handle: RePEc:fau:wpaper:wp2023_01
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    File URL: https://ies.fsv.cuni.cz/en/veda-vyzkum/working-papers/6725
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    More about this item

    Keywords

    cumulative abnormal return; shareholder activism; eventstudy; meta-analysis; model averaging; publication bias;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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