Liquidity and Shareholder Activism

• 成果类型: Article
• 署名作者: Norli, Oyvind; Ostergaard, Charlotte; Schindele, Ibolya
• 署名单位: BI Norwegian Business School
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhu070
• 发表日期: 2015
• 页码: 486
• 关键词: CORPORATE GOVERNANCE; Ownership structure; cross-section; stock returns; Hedge funds; COSTS; investor; IMPACT; sales; RISK

摘要

Blockholders' incentives to intervene in corporate governance are weakened by free-rider problems and high costs of activism. Theory suggests activists may recoup expenses through informed trading of target firms' stock when stocks are liquid. We show that stock liquidity increases the probability of activism but does less so for potentially overvalued firms for which privately informed blockholders may have greater incentives to sell their stake than to intervene. We also document that activists accumulate more stocks in targets when stock is more liquid. We conclude that liquidity helps overcome the free-rider problem and induces activism via preactivism accumulation of target firms' shares.