The forthright brand of shareholder activism hedge funds deploy emerged by the mid-2000s as a major corporate governance phenomenon. This paper explains the rise of hedge fund activism and offers predictions about future developments. The paper begins by distinguishing the “offensive” form...

The brand of shareholder activism associated with hedge funds is a highly topical, yet equally controversial issue. In this article, I provide a synthesis of the key issues surrounding the hedge fund activism phenomenon, many of which are unresolved or have become popularized notions. I focus on...

This paper examines the effectiveness of hedge fund activism in preventing corporate policy deviations. Whereas previous studies focus on policy changes in target firms after intervention, I examine proactive policy changes in all firms that face a threat of intervention. Using mutual fund fire...

We find that hedge fund activism decreases firms’ receipt of government subsidies. Consistent that governments exhibit concern that target firm priorities will deviate from the objectives of subsidies, we find firms reduce (increase) their orientation toward stakeholders (shareholders) after...

We address the question of whether hedge fund and private equity investments in public firms are motivated by corporate governance improvements. As opposed to traditional financial investors both HF and PE are likely to have the incentives to alleviate agency conflicts. However, against the...

We test the empirical validity of a claim that has been playing a central role in debates on corporate governance — the claim that interventions by activist hedge funds have a detrimental effect on the long-term interests of companies and their shareholders. We subject this claim to a...

Based on the German regulatory framework, we provide a more detailed picture about the information disclosure process surrounding the announcement of major shareholdings of hedge funds in listed companies. We separate price and volume effects between three event dates: the transaction date when...

We examine the product market spillover effects of hedge fund activism (HFA) on the industry rivals of target firms. HFA has negative real and stockholder wealth effects on the average rival firm. The effects on rivals' product market performance is commensurate with post-activism improvements...

We look at the reaction to hedge fund activism of managers and shareholders in Japanese firms and explore the implications of our findings for agency theory. We use a qualitative research design which treats the standard agency-theoretical model of the firm as only one possible approach to...