University of Cambridge > > Finance Seminars, CJBS > Online seminar – Value creation in shareholder activism

Online seminar – Value creation in shareholder activism

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  • UserEnrique Schroth, Professor of Finance, EDHEC Business School
  • ClockTuesday 30 November 2021, 13:00-14:15
  • Housevia zoom .

If you have a question about this talk, please contact Emily Brown.

Meeting ID: 868 6554 9117 Password: 437175

We measure value creation by activist investors via structural estimation of a model of the choice between passive investment and activism. Our estimates imply that average returns following activist intent announcements consist of 74.8% expected value creation, or treatment, 13.4% stock picking, and 11.8% sample selection effects. Higher treatment values predict improvements in firm performance and lower proxy contest probabilities, whereas abnormal announcements returns do not, suggesting that our estimate identifies more effective activism campaigns. The evidence demonstrates the importance of using the joint distribution of investment strategies and announcement returns to recover the expected returns and costs of activism.

This talk is part of the Finance Seminars, CJBS series.

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