Title

The Effectiveness of Institutional Activism

Publication Type

Journal Article

Publication Date

7-2001

Abstract

Researchers examined earnings-forecast revisions and stock returns after release of the Focus List of poorly performing companies by the Council of Institutional Investors. Using Tobin's q as a measure of a company's ability to improve performance, researchers found significant and positive abnormal forecast revisions and post-release stock returns for companies with q greater than one. Findings support the proposition that institutional activism is effective for underperforming companies - but only those companies with the ability to respond to the challenge to improve performance.

Discipline

Finance and Financial Management | Portfolio and Security Analysis

Research Areas

Finance

Publication

Financial Analysts Journal

Volume

57

Issue

4

First Page

21

Last Page

26

ISSN

0015-198X

Identifier

10.2469/faj.v57.n4.2462

Publisher

CFA Institute

Additional URL

http://dx.doi.org/10.2469/faj.v57.n4.2462