Scholars@Duke publication: Editor's Choice The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes

Editor's Choice The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes

Publication , Journal Article

Brav, A; Jiang, W; Kim, H

Published in: Review of Financial Studies

2015

This paper studies the long-term effect of hedge fund activism on firm productivity using plant-level information from the U.S. Census Bureau. A typical target firm improves production efficiency in the 3 years after intervention, with stronger improvements in business strategy-oriented interventions. Plants sold after intervention improve productivity significantly under new ownership, suggesting that capital redeployment is an important channel for value creation. Employees of target firms experience stagnation in work hours and wages despite an increase in labor productivity. Additional tests refute alternative explanations attributing the improvement to mean reversion, management's voluntary reforms, industry consolidation shocks, or activists' stock-picking abilities.

Duke Scholars

Author Alon Brav Fuqua School of Business

Published In

Review of Financial Studies

Publication Date

2015

Volume

Issue

Start / End Page

2723 / 2769

Related Subject Headings

Finance
1502 Banking, Finance and Investment
1402 Applied Economics
1401 Economic Theory

Citation

APA

Chicago

ICMJE

MLA

NLM

Brav, A., Jiang, W., & Kim, H. (2015). Editor's Choice The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes. Review of Financial Studies, 28(10), 2723–2769.

Brav, Alon, Wei Jiang, and Hyunseob Kim. “Editor's Choice The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes.” Review of Financial Studies 28, no. 10 (2015): 2723–69.

Brav A, Jiang W, Kim H. Editor's Choice The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes. Review of Financial Studies. 2015;28(10):2723–69.

Brav, Alon, et al. “Editor's Choice The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes.” Review of Financial Studies, vol. 28, no. 10, 2015, pp. 2723–69.

Brav A, Jiang W, Kim H. Editor's Choice The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Labor Outcomes. Review of Financial Studies. 2015;28(10):2723–2769.