Theses and Dissertations

Date of Award


Document Type


Degree Name

Doctor of Philosophy (PhD)


Business Administration

First Advisor

Dr. Andre Varella Mollick

Second Advisor

Dr. Diego Escobari

Third Advisor

Dr. Monika Klara Rabarison


This dissertation includes three separate studies related to shareholder activism campaigns. The first study, presented in Chapter II, examines the question whether shareholder activism creates value for the targets’ shareholder. I find positive and significant abnormal returns on a day of the targeting announcement, 1.55%, and one day after, 1.33%. For Buy-and-Hold return analysis, I find that stock prices of the targets start to decrease 24 months before activism campaign announcements. Further results indicate that the targets are also underperforming to the market and to their matchings at pre-announcement periods. For post-announcement periods, however, targets’ stock returns recover and outperform the market. For operating performance, I find that there is statistically significant deterioration in level of profitability of the targets from period t = -3 vs. t = 0. For the periods post-announcement, target firms are able to efficiently generate more revenues (but not profits) than before. For the second study, presented in Chapter III, I examine the change in idiosyncratic risk of the targets after activism campaigns. I find that changes in institutional ownership are positively related to changes in level of idiosyncratic risk of a target firm. More interestingly, I find that the relationship is nonlinear (inverted U-shape). A further study on the change in ownership concentration effect, I find a negative relation between changing in level of ownership concentration and changing in level of idiosyncratic risk of a target. For the third study, presented in Chapter IV, I find that short sale activities increase gradually from month t = -12 to month t = 0 and peaks at month t = 3 after the activism announcement month t =0. I also find supporting evidence that short-selling activities at the period before activism announcements are made by informed investors. The result implies short sellers with privately informed information will front-run and take advantage of low post-activism returns of the targets. The result is robust after control for matching firm short-selling activities and self-selection bias.


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