This paper studies how hedge fund activism impacts corporate innovation. Firms targeted by activists improve their … innovation efficiency over the five-year period following hedge fund intervention. Despite a tightening in R&D expenditures …, target firms increase innovation output, as measured by both patent counts and citations, with stronger effects among firms …

This paper studies how hedge fund activism reshapes corporate innovation. Firms targeted by hedge fund activists … experience an improvement in innovation efficiency during the five-year period following the intervention. Despite a tightening … in R&D expenditures, target firms experience increases in innovation output, measured by both patent counts and citations …