Rui Albuquerque, Zicheng Lei, Jörg Rocholl, Chendi Zhang Institutional Investors and Corporate Political Activism (01 May 2016) Available at ECGI: https://ecgi.global/working-paper/institutional-investors-and-corporate-political-activism
The landmark decision by the U.S. Supreme Court on Citizens United v. Federal Election Commission asserts for the first time that corporations benefit from First Amendment protection regarding freedom of speech in the form of independent political expenditures, thus creating a new avenue for political activism.
This paper studies how corporations adjusted their political activism in response to this ruling. The paper presents evidence consistent with the hypothesis that institutional investors, in particular public pension funds, have a preference for not using the new avenue for political activism, a preference not shared by other investors.
We examine the long-term effects of interventions by activist hedge funds. Prior papers document positive equal-weighted long-term returns and operating performance improvements following activist interventions, and typically conclude that...Read more
We study the role of hedge fund activists in curbing empire building. We show that firms with poor acquisition records are more likely to become activist targets. Following activist intervention, targeted firms make fewer acquisitions but obtain...Read more
We study institutional investors' impact on going private tender offers by controlling shareholders ("freeze-out" offers) in Israel, where regulation over such offers is loose and where (consequently?) about half of the offers are rejected. In 35...Read more
We propose a novel way of measuring the portfolio-level environmental and social characteristics of 13F institutional investors (the “sustainability footprint”). We show that the environmental (social) footprint of institutional investors has...Read more