Effects of shareholder proposals on the market value of Japanese firms

Ryo Sato; Fumiko Takeda

doi:10.1016/j.iref.2023.03.025

Effects of shareholder proposals on the market value of Japanese firms

Research output: Contribution to journal › Article › peer-review

Abstract

This study investigates the effect of shareholder proposals on the market value of Japanese firms in the second wave of activism from 2017 to 2021. While announcements of receiving a shareholder proposal positively affect stock prices of investee companies, rejection of a shareholder's proposal has a negative impact. Unlike the first wave of activism, proposals related to the election and dismissal of directors are no different from those of other proposals, which may become more important as shareholder proposals diversify. Similar to the first wave, market responses become larger when the large shareholders made the proposals.

Original language	English
Pages (from-to)	320-333
Number of pages	14
Journal	International Review of Economics and Finance
Volume	86
DOIs	https://doi.org/10.1016/j.iref.2023.03.025
Publication status	Published - 2023 Jul
Externally published	Yes

Keywords

Corporate governance
Japan
Shareholder activism
Shareholder proposal

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.iref.2023.03.025

Cite this

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title = "Effects of shareholder proposals on the market value of Japanese firms",

abstract = "This study investigates the effect of shareholder proposals on the market value of Japanese firms in the second wave of activism from 2017 to 2021. While announcements of receiving a shareholder proposal positively affect stock prices of investee companies, rejection of a shareholder's proposal has a negative impact. Unlike the first wave of activism, proposals related to the election and dismissal of directors are no different from those of other proposals, which may become more important as shareholder proposals diversify. Similar to the first wave, market responses become larger when the large shareholders made the proposals.",

keywords = "Corporate governance, Japan, Shareholder activism, Shareholder proposal",

author = "Ryo Sato and Fumiko Takeda",

note = "Funding Information: This work was supported by JSPS KAKENHI Grant Number JP22K01550 . Publisher Copyright: {\textcopyright} 2023 Elsevier Inc.",

year = "2023",

month = jul,

doi = "10.1016/j.iref.2023.03.025",

language = "English",

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journal = "International Review of Economics and Finance",

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T1 - Effects of shareholder proposals on the market value of Japanese firms

AU - Sato, Ryo

AU - Takeda, Fumiko

PY - 2023/7

Y1 - 2023/7

N2 - This study investigates the effect of shareholder proposals on the market value of Japanese firms in the second wave of activism from 2017 to 2021. While announcements of receiving a shareholder proposal positively affect stock prices of investee companies, rejection of a shareholder's proposal has a negative impact. Unlike the first wave of activism, proposals related to the election and dismissal of directors are no different from those of other proposals, which may become more important as shareholder proposals diversify. Similar to the first wave, market responses become larger when the large shareholders made the proposals.

AB - This study investigates the effect of shareholder proposals on the market value of Japanese firms in the second wave of activism from 2017 to 2021. While announcements of receiving a shareholder proposal positively affect stock prices of investee companies, rejection of a shareholder's proposal has a negative impact. Unlike the first wave of activism, proposals related to the election and dismissal of directors are no different from those of other proposals, which may become more important as shareholder proposals diversify. Similar to the first wave, market responses become larger when the large shareholders made the proposals.

KW - Corporate governance

KW - Japan

KW - Shareholder activism

KW - Shareholder proposal

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SP - 320

EP - 333

JO - International Review of Economics and Finance

JF - International Review of Economics and Finance

ER -

Effects of shareholder proposals on the market value of Japanese firms

Abstract

Keywords

ASJC Scopus subject areas

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