Brav, Alon
[Verfasser:in]
;
Jiang, Wei
[Sonstige Person, Familie und Körperschaft];
Ma, Song
[Sonstige Person, Familie und Körperschaft];
Tian, Xuan
[Sonstige Person, Familie und Körperschaft]
How Does Hedge Fund Activism Reshape Corporate Innovation?
Anmerkungen:
In: Journal of Financial Economics (JFE), Forthcoming
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 3, 2017 erstellt
Beschreibung:
This paper studies how hedge fund activism impacts corporate innovation. Firms targeted by activists improve their innovation efficiency over the five-year period following hedge fund intervention. Despite a tightening in R&D expenditures, target firms increase innovation output, as measured by both patent counts and citations, with stronger effects among firms with more diversified innovation portfolios. Reallocation of innovative resources, redeployment of human capital, and change to board-level expertise all contribute to improve target firms' innovation. Additional tests help isolate the effect of intervention from alternative explanations, including mean reversion, sample attrition, voluntary reforms, or activist stock-picking