Investor Activism and Financial Market Structure

Noe, Thomas (2001) Investor Activism and Financial Market Structure. In: The Centre for Economic Policy Research (CEPR) Conference: The Firm and Its Stakeholders - The Evolving Role of Corporate Finance, 21 March 2001, Courmayeur, Italy.

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Abstract

This paper investigates investor activism when there are a number of strategic investors that are capable of intervening in corporate governance. These strategic investors can monitor and/or trade in anonymous financial markets. In equilibrium, a core group of monitoring investors emerges endogenously to curtail managerial opportunism. These core activists both intervene and trade aggressively. Although the smallest investors are passive, there is no monotonic relationship between the size of preexisting shareholdings and activism. In fact, among those investors who choose activism, those with the smallest holdings are the most aggressive.

Item Type: Conference or Workshop Item (Paper)
Keywords: Corporate governance; securities markets; investment banking; finance
Subject(s): Finance
Date Deposited: 25 Mar 2012 19:40
Last Modified: 01 Mar 2017 11:53
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/2914

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