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Activism and takeovers

Burkart, Mike ORCID: 0000-0002-0954-4499 and Lee, Samuel (2022) Activism and takeovers. Review of Financial Studies, 35 (4). 1868 - 1896. ISSN 0893-9454

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Identification Number: 10.1093/rfs/hhab039


We compare activism and takeovers from the perspective of a blockholder who can provide effort to improve firm value. We show that free-riding behavior by dispersed shareholders has the following implications: First, activism can be more profitable than a hostile takeover even if it is less efficient. Second, activism is most efficient when it brokers, rather than substitutes for, takeovers. Third, such takeover activism earns superior returns. More broadly, our theory implies that activists specialize in governance reforms with limited, temporary ownership being a strength rather than a shortcoming of activism.

Item Type: Article
Official URL:
Additional Information: © 2021 The Authors
Divisions: Finance
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Date Deposited: 06 Aug 2021 14:24
Last Modified: 20 May 2022 23:15

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