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Blockholder disclosure thresholds and hedge fund activism
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Ordonez-Calafi, Guillem and Bernhardt, Dan (2022) Blockholder disclosure thresholds and hedge fund activism. Journal of Financial and Quantitative Analysis, 57 (7). pp. 2834-2859. doi:10.1017/S0022109022000059 ISSN 0022-1090.
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Official URL: http://doi.org/10.1017/S0022109022000059
Abstract
Blockholder disclosure thresholds shape incentives for hedge fund activism, which are jointly determined with real investment and managerial behavior. Uninformed investors value lower thresholds (greater transparency) when the cost of trading against an informed activist outweighs the benefits of the activist’s disciplining of management. Conversely, activists may desire disclosure thresholds if the threat of their participation discourages managerial malfeasance, which is their source of profits. Hedge fund activism can be excessive: If market opacity sufficiently harms uninformed investors, the costs of reduced real investment outweigh the social benefits from managerial disciplining, and society benefits from lower thresholds.
| Item Type: | Journal Article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
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| Divisions: | Faculty of Social Sciences > Economics | ||||||||
| Library of Congress Subject Headings (LCSH): | Hedge funds , Stockholders , Stockholders' derivative actions , Stocks , Corporations -- Investor relations , Corporate governance | ||||||||
| Journal or Publication Title: | Journal of Financial and Quantitative Analysis | ||||||||
| Publisher: | Cambridge University Press | ||||||||
| ISSN: | 0022-1090 | ||||||||
| Official Date: | November 2022 | ||||||||
| Dates: |
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| Volume: | 57 | ||||||||
| Number: | 7 | ||||||||
| Page Range: | pp. 2834-2859 | ||||||||
| DOI: | 10.1017/S0022109022000059 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Reuse Statement (publisher, data, author rights): | This article has been accepted for publication in a revised form for publication in Journal of Financial and Quantitative Analysis Link to Journal’s site on https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 4 March 2021 | ||||||||
| Date of first compliant Open Access: | 5 March 2021 | ||||||||
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