Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/286330 
Year of Publication: 
2023
Series/Report no.: 
IES Working Paper No. 1/2023
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
Shareholder activism constitutes an increasingly prominent feature of corporate governance landscape. There is a controversy in prior research over whether and how much value activism creates. We examine whether estimates of the impact of shareholder activism are published selectively in prior empirical research. We argue that economists may tend to view activism as a vital corporate governance tool to overcome agency problems and promote economic efficiency. Researchers and journal editors may thus be biased towards consider empirical results in support of the beneficial role of shareholder activism as more reliable than insignificant or opposite results. Consistent with this prediction we document a substantial bias towards publishing (i) higher (rather than lower) and (ii) statistically significant (rather than insignificant) estimates of the impact of shareholder activism. Due to that the pool of estimates in prior empirical literature is biased upwards. The value created by the various forms of shareholder activism corrected for these biases ranges from 0.38 to 3.23% with a median value of 1.94%.
Subjects: 
cumulative abnormal return
shareholder activism
eventstudy
meta-analysis
model averaging
publication bias
JEL: 
G14
G30
G34
L20
Document Type: 
Working Paper

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