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ROLE OF INVESTOR RELATIONS IN COPING WITH SHAREHOLDER ACTIVISM

Ge, Lin (2018) ROLE OF INVESTOR RELATIONS IN COPING WITH SHAREHOLDER ACTIVISM. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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Abstract

I study an unexplored role of Investor Relations (IR) firms: assisting public companies to cope with shareholder activism. Using hand-collected data on IR firms and their 2,336 publicly listed clients during 2003 to 2014 and shareholder activism campaign data for the twelve-year period, I find that public companies that hire IR firms experience a significantly lower number of activism campaigns, have a higher probability of management winning against the activist, and have a higher likelihood of mutual funds voting with the management, compared to a matched sample. I also document two plausible channels through which IR firms help incumbent management cope with shareholder activism: (i) organizing key face-to-face meetings with institutional investors, and (ii) managing media. Such results are robust to controls including proxy advisory firms’ recommendations. Lastly, the event study evidence suggests that IR firms enhance management entrenchment instead of shareholder value.

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Details

Item Type: University of Pittsburgh ETD
Status: Unpublished
Creators/Authors:
CreatorsEmailPitt UsernameORCID
Ge, LinLin.Ge@pitt.edulig40
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairDenis, Daviddjdenis@katz.pitt.edu
Committee MemberLehn, Kennethlehn@katz.pitt.edu
Committee MemberSchlingemann, Frederikschlinge@katz.pitt.edu
Committee MemberBranson, Douglasbranson@pitt.edu
Date: 27 September 2018
Date Type: Publication
Defense Date: 10 August 2018
Approval Date: 27 September 2018
Submission Date: 15 August 2018
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Number of Pages: 123
Institution: University of Pittsburgh
Schools and Programs: Joseph M. Katz Graduate School of Business > Business Administration
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: Investor relations; shareholder activism; institutional investors; information and market efficiency
Date Deposited: 27 Sep 2018 17:01
Last Modified: 27 Sep 2018 17:01
URI: http://d-scholarship.pitt.edu/id/eprint/35205

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