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Wolf Pack Activism

Author

Listed:
  • Brav, Alon
  • Dasgupta, Amil
  • Mathews, Richmond

Abstract

Blockholder monitoring is key to corporate governance, but blockholders large enough to exercise significant unilateral influence are rare. Mechanisms that enable small blockholders to exert collective influence are therefore important. It is alleged that institutional blockholders sometimes implicitly coordinate their interventions, with one acting as "lead" activist and others as peripheral"wolf pack" members. We present a model of wolf pack activism. Our model formalizes a key source of complementarity across the engagement strategies of activists and highlights the catalytic role played by the leader. We also characterize share acquisition in pack formation, providing testable implications on ownership and price dynamics.

Suggested Citation

  • Brav, Alon & Dasgupta, Amil & Mathews, Richmond, 2016. "Wolf Pack Activism," CEPR Discussion Papers 11507, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11507
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    References listed on IDEAS

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    Cited by:

    1. 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.

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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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