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Hedge fund activism, corporate governance, and firm performance

Publication ,  Journal Article
Brav, A; Jiang, W; Partnoy, F; Thomas, R
Published in: Journal of Finance
August 1, 2008

Using a large hand-collected data set from 2001 to 2006, we find that activist hedge funds in the United States propose strategic, operational, and financial remedies and attain success or partial success in two-thirds of the cases. Hedge funds seldom seek control and in most cases are nonconfrontational. The abnormal return around the announcement of activism is approximately 7%, with no reversal during the subsequent year. Target firms experience increases in payout, operating performance, and higher CEO turnover after activism. Our analysis provides important new evidence on the mechanisms and effects of informed shareholder monitoring. © 2008 The American Finance Association.

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Published In

Journal of Finance

DOI

EISSN

1540-6261

ISSN

0022-1082

Publication Date

August 1, 2008

Volume

63

Issue

4

Start / End Page

1729 / 1775

Related Subject Headings

  • Finance
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1502 Banking, Finance and Investment
 

Citation

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Brav, A., Jiang, W., Partnoy, F., & Thomas, R. (2008). Hedge fund activism, corporate governance, and firm performance. Journal of Finance, 63(4), 1729–1775. https://doi.org/10.1111/j.1540-6261.2008.01373.x
Brav, A., W. Jiang, F. Partnoy, and R. Thomas. “Hedge fund activism, corporate governance, and firm performance.” Journal of Finance 63, no. 4 (August 1, 2008): 1729–75. https://doi.org/10.1111/j.1540-6261.2008.01373.x.
Brav A, Jiang W, Partnoy F, Thomas R. Hedge fund activism, corporate governance, and firm performance. Journal of Finance. 2008 Aug 1;63(4):1729–75.
Brav, A., et al. “Hedge fund activism, corporate governance, and firm performance.” Journal of Finance, vol. 63, no. 4, Aug. 2008, pp. 1729–75. Scopus, doi:10.1111/j.1540-6261.2008.01373.x.
Brav A, Jiang W, Partnoy F, Thomas R. Hedge fund activism, corporate governance, and firm performance. Journal of Finance. 2008 Aug 1;63(4):1729–1775.
Journal cover image

Published In

Journal of Finance

DOI

EISSN

1540-6261

ISSN

0022-1082

Publication Date

August 1, 2008

Volume

63

Issue

4

Start / End Page

1729 / 1775

Related Subject Headings

  • Finance
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1502 Banking, Finance and Investment