Investor Activism and Financial Market Structure

Noe, Thomas (1999) Investor Activism and Financial Market Structure. In: European Finance Association Conference, 27 August, 1999, Helsinki, Finland.

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Abstract

This article 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: 18 Mar 2012 14:46
Last Modified: 01 Mar 2017 11:53
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/2916

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