Does Shareholder Activism Add Value to The Performance of the Firms in India? The Role of Disclosures as Moderators
DOI:
https://doi.org/10.5281/%20zenodo.13931970Abstract
The study's main aim is to determine the role of shareholder activism (SHA) on the performance of the firms. The performance of the firms is viewed as operating performance, valuation, and technical efficiency. The relevant panel data is taken for 78 non-financial firms part BSE-100 index from India for five years (2015-2019). A shareholder activism index is built to measure shareholder activism. The analysis is conducted at the three levels, first, by the linear association, second by non-linear association and third by using transparency and disclosures (TD) as an interaction term on the association of SHA and performance of the firms. It is found that SHA significantly influences the firm's operating performance. The non-linear linkage is significant. A significant positive association of TD as moderating variable on operating performance and efficiency of the firms ensures the supportive role of SHA on the performance of the firms. The study's findings should reduce widespread reluctance and resistance to SHA. The first main implication of the study is that the managers understand the positive role of SHA on the firm's performance. It would be one of the two main implications of the study. The second main implication is for the policymakers. The significant and positive association of SHA for the performance of the firms can be the basis for the long-term policy on SHA. Scarcely available are the studies that have observed on the association of SHA for the efficiency of the firms. This study would be the first such study on the topic. Moreover, the literature does not see the non-linear association of SHA on the firms' operating performance, valuation, and efficiency. This study would be the first such study. Above all, no other study is observed using TD as the moderating variable to study the impact of SHA on the performance of the firms.
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