Wolf Pack Activism

56 Pages Posted: 20 Sep 2016

See all articles by Alon Brav

Alon Brav

Duke University - Fuqua School of Business; European Corporate Governance Institute (ECGI); National Bureau of Economic Research (NBER)

Amil Dasgupta

London School of Economics (LSE); European Corporate Governance Institute (ECGI)

Richmond D. Mathews

University of Maryland - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: September 2016

Abstract

Blockholder monitoring is key to corporate governance, but blockholders large enough to exercise significant unilateral influence are rare. Mechanisms that enable small blockholders to exert collective influence are therefore important. It is alleged that institutional blockholders sometimes implicitly coordinate their interventions, with one acting as "lead" activist and others as peripheral"wolf pack" members. We present a model of wolf pack activism. Our model formalizes a key source of complementarity across the engagement strategies of activists and highlights the catalytic role played by the leader. We also characterize share acquisition in pack formation, providing testable implications on ownership and price dynamics.

JEL Classification: G34

Suggested Citation

Brav, Alon and Dasgupta, Amil and Mathews, Richmond D., Wolf Pack Activism (September 2016). CEPR Discussion Paper No. DP11507, Available at SSRN: https://ssrn.com/abstract=2840704

Alon Brav (Contact Author)

Duke University - Fuqua School of Business ( email )

100 Fuqua Drive
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European Corporate Governance Institute (ECGI) ( email )

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National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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Amil Dasgupta

London School of Economics (LSE) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7458 (Phone)
+44 20 7955 7420 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Richmond D. Mathews

University of Maryland - Department of Finance ( email )

Robert H. Smith School of Business
Van Munching Hall
College Park, MD 20742
United States

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