Activist investors: A literature review on recent evidence

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Abstract

This study reviews, summarizes and synthesizes the most recent findings regarding activist investors. Based on a literature review framework we provide a multidimensional analysis synthesizing the state-of-the-art of activist investor attacks in global financial markets where activist investors increase their number of campaigns and expand their market scope over the last years significantly. For this purpose, 98 articles were identified discussing activist investors in the time period of 2018–2023. Out of this pool, only 25 studies explicitly examine the recent market activities, the strategies and the performance of activist investors. The analysis of the 25 studies reveals new trends of activist investors regarding their investment strategies such as targeting women-led firms and using open activism more frequently. Activists focus on enforcing demands for the sale of the company, changing management composition, influencing corporate governance, and a shift in the strategy of the target. Concerning the investment performance activist investors overall achieve positive abnormal returns. The financial performance of the target firms indicates an ambivalent picture: In the short term, their performance shows strong and poor financial results alike. In the long run, this divergence levels off indicating a more negative impact on financial performance resulting from activist investors.

Keywords: Activist Investors Campaigns, Investment Strategies and Performance, International Perspective, Semi-Systematic Literature Review

Authors’ individual contribution: Conceptualization — D.S., J.V., and N.L.; Methodology — D.S., J.V., and N.L.; Investigation — D.S., J.V., and N.L.; Formal Analysis — D.S., J.V., and N.L.; Resources — D.S., J.V., and N.L.; Data Curation — D.S., J.V., and N.L.; Writing — Original Draft — N.L.; Writing — Review & Editing — D.S., J.V., and N.L.; Visualization — D.S., J.V., and N.L.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G30, G34, G32, G31

Received: 04.09.2023
Accepted: 06.12.2023
Published online: 08.12.2023

How to cite this paper: Schiereck, D., Vogt, J., & Lethaus, N. (2023). Activist investors: A literature review on recent evidence. Corporate Ownership & Control, 20(4), 129–146. https://doi.org/10.22495/cocv20i4art9