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The intra-industry effects of proxy contests

Author

Listed:
  • Fang Chen

    (University of New Haven)

  • Jian Huang

    (Towson University)

  • Han Yu

    (Southern Connecticut State University)

Abstract

In this study, we examine the intra-industry effect of proxy contests. Proxy contests convey the information of common industrial risks or expected competitive relationship change. We find significant negative abnormal returns in the group of competitors of target firms with negative abnormal returns, and such negative abnormal returns become larger for similar-size competitors. In contrast, there are no significant abnormal returns for competitors of target firms with positive abnormal returns. These findings are consistent with the information-based theory but not the competitive theory.

Suggested Citation

  • Fang Chen & Jian Huang & Han Yu, 2020. "The intra-industry effects of proxy contests," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(2), pages 321-347, April.
    • Handle: RePEc:spr:jecfin:v:44:y:2020:i:2:d:10.1007_s12197-019-09492-6
    DOI: 10.1007/s12197-019-09492-6
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    References listed on IDEAS

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    Cited by:

    1. Josef Bajzik & Tomas Havranek & Zuzana Irsova & Jiri Novak, 2023. "Do Shareholder Activism Announcements Affect Stock Prices? A Meta-Analysis," Working Papers 2023/17, Czech National Bank.
    2. Josef Bajzik, 2023. "Does Shareholder Activism Have a Long-Lasting Impact on Company Value? A Meta-Analysis," Working Papers 2023/10, Czech National Bank.
    3. Bajzík, Josef & Havranek, Tomas & Irsova, Zuzana & Novak, Jiri, 2023. "Does Shareholder Activism Create Value? A Meta-Analysis," CEPR Discussion Papers 18233, C.E.P.R. Discussion Papers.
    4. Bajzik, Josef, 2023. "Is the role of shareholder activism in corporate governance overestimated?," Finance Research Letters, Elsevier, vol. 58(PC).

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    More about this item

    Keywords

    Proxy contest; Intra-industry effect; Information-based effect; Competitive effect;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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