Different Horizons: The Effects of Hedge Fund Activism Versus Corporate Shareholder Activism on Strategic Actions

• DOI: 10.1177/01492063211022831
• Publication Date: 2021-06-18T11:51:58Z
• Authors: Mark R. DesJardine; Wei Shi; Zhihui Sun
• Keywords: Sample (material)

How do firms alter their strategic actions when targeted by different types of activist shareholders? We argue that hedge fund activists threaten in ways lead them to conserve resources and scale back simplify actions, which refer long-run competitive requiring substantial investment. By comparison, corporate shareholder bestow with new freedoms increase flexibility expand complexify actions. Using a matched sample difference-in-differences methodology, we find support for our theory: Firms decrease the intensity complexity while those Our study contributes research on governance dynamics highlighting differential effects shareholders firms’