TY - JOUR
T1 - Active block investors and corporate governance around the world
AU - Kim, Hugh
AU - Liao, Rose C.
AU - Wang, Yan
N1 - Publisher Copyright:
© 2015 Elsevier B.V.
PY - 2015/11/1
Y1 - 2015/11/1
N2 - In this paper, we examine a sample of 3119 minority block acquisitions around the world. One in seven firms are targeted by active investors who either have their own representatives on the board or in the extreme case, replace existing CEOs. We find that active investors are more prevalent in countries with good investor protection. Further, firms targeted by active investors experience significantly higher announcement returns and a significantly higher increase in profitability, sales, and investment expenditures subsequent to the block acquisition, especially in countries with good investor protection.
AB - In this paper, we examine a sample of 3119 minority block acquisitions around the world. One in seven firms are targeted by active investors who either have their own representatives on the board or in the extreme case, replace existing CEOs. We find that active investors are more prevalent in countries with good investor protection. Further, firms targeted by active investors experience significantly higher announcement returns and a significantly higher increase in profitability, sales, and investment expenditures subsequent to the block acquisition, especially in countries with good investor protection.
KW - Block acquisitions
KW - International corporate governance
UR - http://www.scopus.com/inward/record.url?scp=84959551517&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84959551517&partnerID=8YFLogxK
U2 - 10.1016/j.intfin.2015.05.009
DO - 10.1016/j.intfin.2015.05.009
M3 - Article
AN - SCOPUS:84959551517
SN - 1042-4431
VL - 39
SP - 181
EP - 194
JO - Journal of International Financial Markets, Institutions and Money
JF - Journal of International Financial Markets, Institutions and Money
ER -