Active block investors and corporate governance around the world

Hugh Kim, Rose C. Liao and Yan Wang

Journal of International Financial Markets, Institutions and Money, 2015, vol. 39, issue C, 181-194

Abstract: 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.

Keywords: Block acquisitions; International corporate governance (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:39:y:2015:i:c:p:181-194

DOI: 10.1016/j.intfin.2015.05.009

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