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Managerial activism

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  • Ağca, Şenay
  • Togan-Eğrican, Aslı

Abstract

We examine managerial activism through collective action in the corporate sector. Activist managers spend considerable resources in pursuing pro-business and pro-manager issues. While managerial activism is valuable in the pursuit of pro-business strategies, pro-manager agendas may exacerbate agency problems. Our evidence shows that firm performance improves with managerial activism through collective pro-business effort but is diminished by pro-manager activism. Furthermore, pro-business activism typically increases CEO compensation, whereas pro-manager activism decreases it. Firms that benefit most from collective managerial activism are those that are government dependent, have more intangible assets, or operate in industries with low competition. Overall, pro-business managerial activism adds value to firms, especially when information dissemination is more essential due to firm characteristics.

Suggested Citation

  • Ağca, Şenay & Togan-Eğrican, Aslı, 2024. "Managerial activism," Journal of Corporate Finance, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:corfin:v:86:y:2024:i:c:s0929119924000506
    DOI: 10.1016/j.jcorpfin.2024.102588
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    More about this item

    Keywords

    Corporate governance; Managerial activism; Lobbying; Firm performance; Corporate social responsibility;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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