Skip to main content
SpringerLink
Log in

Exploring the research fronts and main paths of literature: a case study of shareholder activism research

  • Published:
Scientometrics Aims and scope Submit manuscript

Abstract

As a relatively young and vibrant discipline, shareholder activism has evolved to become a critical element of corporate governance research. While both finance and law scholars have revealed strong interest on shareholder activism, the heterogeneity in the research concentration of these two fields makes shareholder activism a fragmented discipline. We believe it would be interesting and insightful to conduct a citation-based analysis through the case study encompassing related articles on this topic published in both finance and law journals. We have adopted main path analysis to map out the evolution and research fronts of shareholder activism spanning over 30 years. The results indicated that shareholder activism research has developed in several stages: discussions on theoretical foundation, explorations on the “shareholder activism versus firm performance” correlation, the exceptions to the “one-share, one-vote” rule, the emergence of hedge fund activism research, and the recent “say-on-pay” campaigns. Edge-betweenness based clustering was used to categorize the citation network into coherent groups, with the most popular themes for the period 2003–2013 including “pressure and monitoring from institutional investors”, “shareholder activism in CSR and climate change”, “say-on-pay movement and board responsiveness”, and “shareholder voting and shareholder rights”. The trends are also discussed herein. This case study should contribute to future studies in both the practical and academic arenas.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Notes

  1. Choi and Fisch (2003) specifically pointed out some key parties’ failure in preventing the Enron scandal. The key parties include stock analysts, accountants, and proxy advisors.

References

  • Aggarwal, R., Erel, I., Ferreira, M., & Matos, P. (2011). Does governance travel around the world? Evidence from institutional investors. Journal of Financial Economics, 100(1), 154–181.

    Article  Google Scholar 

  • Anabtawi, I., & Stout, L. (2008). Fiduciary duties for activist shareholders. Stanford Law Review, 60, 1255–2131.

    Google Scholar 

  • Armstrong, C. S., Gow, I. D., & Larcker, D. F. (2013). The efficacy of shareholder voting: evidence from equity compensation plans. Journal of Accounting Research, 51(5), 909–950.

    Article  Google Scholar 

  • Bajo, E., Barbi, M., Bigelli, M., & Hillier, D. (2013). The role of institutional investors in public-to-private transactions. Journal of Banking & Finance, 37(11), 4327–4336.

    Article  Google Scholar 

  • Barberá-Tomás, D., Jiménez-Sáez, F., & Castelló-Molina, I. (2011). Mapping the importance of the real world: The validity of connectivity analysis of patent citations networks. Research Policy, 40(3), 473–486.

    Article  Google Scholar 

  • Bethel, J.E., & Gillan, S.L. (2002). The impact of the institutional and regulatory environment on shareholder voting. Financial Management, 31(4), 29–54.

  • Bizjak, J. M., & Marquette, C. J. (1998). Are shareholder proposals all bark and no bite? Evidence from shareholder resolutions to rescind poison pills. Journal of Financial and Quantitative Analysis, 33(04), 499–521.

    Article  Google Scholar 

  • Borokhovich, K. A., Brunarski, K., Harman, Y. S., & Parrino, R. (2006). Variation in the monitoring incentives of outside stockholders. Journal of Law and Economics, 49(2), 651–680.

    Article  Google Scholar 

  • Brav, A., Jiang, W., Partnoy, F., & Thomas, R. (2008). Hedge fund activism, corporate governance, and firm performance. The Journal of Finance, 63(4), 1729–1775. doi:10.2307/25094488.

    Article  Google Scholar 

  • Brownstein, A.R., & Kirman, I. (2004). Can a board say no when shareholders say yes? Responding to majority vote resolutions. The Business Lawyer, 60(1), 23–77.

  • Callen, J. L., & Fang, X. (2013). Institutional investor stability and crash risk: Monitoring versus short-termism? Journal of Banking & Finance, 37(8), 3047–3063.

    Article  Google Scholar 

  • Chen, X., Harford, J., & Li, K. (2007). Monitoring: Which institutions matter? Journal of Financial Economics, 86(2), 279–305.

    Article  Google Scholar 

  • Chen, Y.-B., Liu, J. S., & Lin, P. (2013). Recent trend in graphene for optoelectronics. Journal of Nanoparticle Research, 15(2), 1–14.

    Article  Google Scholar 

  • Choi, S.J., & Fisch, J.E. (2003). How to fix wall street: A voucher financing proposal for securities intermediaries. Yale Law Journal, 113(2), 269–346.

  • Choi, S. J., & Fisch, J. E. (2008). On beyond Calpers: survey evidence on the developing role of public pension funds in corporate governance. Vanderbilt Law Review, 61, 315.

    Google Scholar 

  • Chuang, T. C., Liu, J. S., Lu, L. Y., & Lee, Y. (2014). The main paths of medical tourism: From transplantation to beautification. Tourism Management, 45, 49–58.

    Article  Google Scholar 

  • Clifford, C. P. (2008). Value creation or destruction? Hedge funds as shareholder activists. Journal of Corporate Finance, 14(4), 323–336.

    Article  Google Scholar 

  • Cotter, J. F., Palmiter, A. R., & Thomas, R. S. (2013). First year of say-on-pay under Dodd-Frank: An empirical analysis and look forward. The George Washington Law Review, 81, 967.

    Google Scholar 

  • Cziraki, P., Renneboog, L., & Szilagyi, P. G. (2010). Shareholder activism through proxy proposals: The European perspective. European Financial Management, 16(5), 738–777.

    Article  Google Scholar 

  • Davis, G. F., & Kim, E. H. (2007). Business ties and proxy voting by mutual funds. Journal of Financial Economics, 85(2), 552–570. doi:10.1016/j.jfineco.2005.04.003.

    Article  Google Scholar 

  • Del Guercio, D., Seery, L., & Woidtke, T. (2008). Do boards pay attention when institutional investor activists “just vote no”? Journal of Financial Economics, 90(1), 84–103.

    Article  Google Scholar 

  • Economist, T. (September 2014). Out of control. The Economist. Retrieved from http://www.economist.com/news/finance-and-economics/21618889-more-worlds-big-stockmarkets-are-allowing-firms-alibaba-sideline.

  • Edmans, A., Fang, V. W., & Zur, E. (2013). The effect of liquidity on governance. Review of Financial Studies, 26(6), 1443–1482.

    Article  Google Scholar 

  • Ertimur, Y., Ferri, F., & Muslu, V. (2011). Shareholder activism and CEO pay. The Review of Financial Studies, 24(2), 535–592. doi:10.1093/rfs/hhq113.

    Article  Google Scholar 

  • Ertimur, Y., Ferri, F., & Oesch, D. (2013). Shareholder votes and proxy advisors: evidence from say on pay. Journal of Accounting Research, 51(5), 951–996.

    Article  Google Scholar 

  • Ertimur, Y., Ferri, F., & Stubben, S. R. (2010). Board of directors’ responsiveness to shareholders: Evidence from shareholder proposals. Journal of Corporate Finance, 16(1), 53–72.

    Article  Google Scholar 

  • Faleye, O. (2007). Classified boards, firm value, and managerial entrenchment. Journal of Financial Economics, 83(2), 501–529.

    Article  Google Scholar 

  • Fassin, Y. (2012). Stakeholder management, reciprocity and stakeholder responsibility. Journal of Business Ethics, 109(1), 83–96.

    Article  Google Scholar 

  • Ferri, F., & Maber, D. A. (2013). Say on pay votes and CEO compensation: Evidence from the UK. Review of Finance, 17(2), 527–563.

    Article  Google Scholar 

  • Ferri, F., & Sandino, T. (2009). The impact of shareholder activism on financial reporting and compensation: The case of employee stock options expensing. The Accounting Review, 84(2), 433–466. doi:10.2308/accr.2009.84.2.433.

    Article  Google Scholar 

  • Gallagher, D. R., Gardner, P. A., & Swan, P. L. (2013). Governance through trading: Institutional swing trades and subsequent firm performance. Journal of Financial and Quantitative Analysis, 48(02), 427–458.

    Article  Google Scholar 

  • Giannetti, M., & Laeven, L. (2009). Pension reform, ownership structure, and corporate governance: Evidence from a natural experiment. Review of Financial Studies, 22(10), 4091–4127.

    Article  Google Scholar 

  • Gillan, S. L., & Starks, L. T. (2000). Corporate governance proposals and shareholder activism: The role of institutional investors. Journal of Financial Economics, 57(2), 275–305.

    Article  Google Scholar 

  • Gillan, S., & Starks, L. T. (2007). The evolution of shareholder activism in the United States. Available at SSRN 959670.

  • Girvan, M., & Newman, M. E. (2002). Community structure in social and biological networks. Proceedings of the National Academy of Sciences, 99(12), 7821–7826.

    Article  MathSciNet  MATH  Google Scholar 

  • Goranova, M., & Ryan, L.V. (2013). Shareholder activism a multidisciplinary review. Journal of Management, 40(5), 1230–1268.

  • Gordon, J. N. (2008). Proxy contests in an era of increasing shareholder power: Forget Issuer proxy access and focus on e-proxy. Vanderbilt Law Review, 61, 475.

    Google Scholar 

  • Gordon, J. N. (2009). “Say on pay”: Cautionary notes on the U.K. experience and the case for shareholder opt-in. Harvard Journal on Legislation, 46(2), 323–367.

    Google Scholar 

  • Greenwood, R., & Schor, M. (2009). Investor activism and takeovers. Journal of Financial Economics, 92(3), 362–375. doi:10.1016/j.jfineco.2008.05.005.

    Article  Google Scholar 

  • Groden, C. (March, 2016). These senators want to reign in activist investors. Fortune. Retrieved from http://fortune.com/2016/03/18/democrats-shareholder-activism/.

  • Guercio, D. D., & Hawkins, J. (1999). The motivation and impact of pension fund activism. Journal of Financial Economics, 52(3), 293–340.

    Article  Google Scholar 

  • Guo, R.-J., Kruse, T. A., & Nohel, T. (2008). Undoing the powerful anti-takeover force of staggered boards. Journal of Corporate Finance, 14(3), 274–288. doi:10.1016/j.jcorpfin.2008.03.007.

    Article  Google Scholar 

  • Harris, L. (2011). The politics of shareholder voting. New York University Law Review, 86(6), 1761.

    Google Scholar 

  • Helwege, J., Intintoli, V. J., & Zhang, A. (2012). Voting with their feet or activism? Institutional investors’ impact on CEO turnover. Journal of Corporate Finance, 18(1), 22–37. doi:10.1016/j.jcorpfin.2011.10.002.

    Article  Google Scholar 

  • Hu, H.T., & Black, B. (2006). Empty voting and hidden (morphable) ownership: Taxonomy, implications, and reforms. The Business Lawyer, 61(3), 1011–1070.

  • Hu, H. T., & Black, B. (2007). Hedge funds, insiders, and the decoupling of economic and voting ownership: Empty voting and hidden (morphable) ownership. Journal of Corporate Finance, 13(2), 343–367.

    Article  Google Scholar 

  • Hummon, N. P., & Dereian, P. (1989). Connectivity in a citation network: The development of DNA theory. Social Networks, 11(1), 39–63.

    Article  Google Scholar 

  • Huson, M. R., Parrino, R., & Starks, L. T. (2001). Internal monitoring mechanisms and CEO turnover: A long-term perspective. The Journal of Finance, 56(6), 2265–2297.

    Article  Google Scholar 

  • Kahan, M., & Rock, E.B. (2007). Hedge funds in corporate governance and corporate control. University of Pennsylvania Law Review, 155(5), 1021–1093.

  • Kang, M.S. (2013). Shareholder voting as veto. Indiana Law Journal, 88(4), 1299–1345.

  • Karpoff, J. M., Malatesta, P. H., & Walkling, R. A. (1996). Corporate governance and shareholder initiatives: Empirical evidence. Journal of Financial Economics, 42(3), 365–395.

    Article  Google Scholar 

  • Klein, A., & Zur, E. (2009). Entrepreneurial shareholder activism: Hedge funds and other private investors. The Journal of Finance, 64(1), 187–229.

    Article  Google Scholar 

  • Klein, A., & Zur, E. (2011). The impact of hedge fund activism on the target firm’s existing bondholders. Review of Financial Studies, 24(5), 1735–1771.

    Article  Google Scholar 

  • Lee, M.-D. P., & Lounsbury, M. (2011). Domesticating radical rant and rage: An exploration of the consequences of environmental shareholder resolutions on corporate environmental performance. Business and Society, 50(1), 155–188.

    Article  Google Scholar 

  • Levit, D., & Malenko, N. (2011). Nonbinding voting for shareholder proposals. The Journal of Finance, 66(5), 1579–1614.

    Article  Google Scholar 

  • Liu, J. S., & Lu, L. Y. (2012). An integrated approach for main path analysis: Development of the Hirsch index as an example. Journal of the American Society for Information Science and Technology, 63(3), 528–542.

    Article  Google Scholar 

  • Liu, J. S., Lu, L. Y. Y., Lu, W.-M., & Lin, B. J. Y. (2013a). Data envelopment analysis 1978–2010: A citation-based literature survey. Omega, 41(1), 3–15.

    Article  Google Scholar 

  • Liu, J. S., Lu, L. Y. Y., Lu, W.-M., & Lin, B. J. Y. (2013b). A survey of DEA applications. Omega, 41(5), 893–902.

    Article  Google Scholar 

  • Lowenstein, L. (1989). Shareholder Voting Rights: A Response to SEC Rule 19c-4 and to Professor Gilson. Columbia Law Review, 89(5), 979–1014.

  • Lu, L. Y., Lin, B. J., Liu, J. S., & Yu, C.-Y. (2012). Ethics in nanotechnology: What’s being done? What’s missing? Journal of Business Ethics, 109(4), 583–598.

    Article  Google Scholar 

  • Lu, L. Y. Y., & Liu, J. S. (2013a). An innovative approach to identify the knowledge diffusion path: The case of resource-based theory. Scientometrics, 94(1), 225–246.

    Article  Google Scholar 

  • Lu, L.Y.Y., & Liu, J.S. (2013b). The knowledge diffusion paths of corporate social responsibility—From 1970 to 2011. Corporate Social Responsibility and Environmental Management, 21(2), 113–128.

  • Mackenzie, C., Rees, W., & Rodionova, T. (2013). Do responsible investment indices improve corporate social responsibility? FTSE4Good’s impact on environmental management. Corporate Governance: An International Review, 21(5), 495–512. doi:10.1111/corg.12039.

    Article  Google Scholar 

  • Martin, S., & Partnoy, F. (2005). Encumbered shares. University of Illinois Law Review, 775–814.

  • Monks, R., Miller, A., & Cook, J. (2004). Shareholder activism on environmental issues: A study of proposals at large US corporations (2000–2003). Natural Resources Forum, 28(4), 317–330.

  • Newman, M. E. (2006). Modularity and community structure in networks. Proceedings of the National Academy of Sciences, 103(23), 8577–8582.

    Article  Google Scholar 

  • Oh, C. H., Park, J.-H., & Ghauri, P. N. (2013). Doing right, investing right: Socially responsible investing and shareholder activism in the financial sector. Business Horizons, 56(6), 703–714.

    Article  Google Scholar 

  • Parrino, R., Sias, R. W., & Starks, L. T. (2003). Voting with their feet: Institutional ownership changes around forced CEO turnover. Journal of Financial Economics, 68(1), 3–46.

    Article  Google Scholar 

  • Rehbein, K., & Logsdon, J. M. (2013). Corporate responses to shareholder activists: considering the dialogue alternative. Journal of Business Ethics, 112(1), 137–154. doi:10.1007/s10551-012-1237-2.

    Article  Google Scholar 

  • Reid, E. M., & Toffel, M. W. (2009). Responding to public and private politics: Corporate disclosure of climate change strategies. Strategic Management Journal, 30(11), 1157–1178. doi:10.1002/smj.796.

    Article  Google Scholar 

  • Rock, E. B. (1991). Logic and (Uncertain) significance of institutional shareholder activism. The Georgetown Law Journal, 79, 445.

    Google Scholar 

  • Romano, R. (1993). Public pension fund activism in corporate governance reconsidered. Columbia Law Review, 93(4), 795–853.

  • Romano, Roberta. (2003). Does confidential proxy voting matter? The Journal of Legal Studies, 32(2), 465–509. doi:10.1086/377048.

    Article  Google Scholar 

  • Rose, P. (2010). Common agency and the public corporation. Vanderbilt Law Review, 63(5), 1355.

    Google Scholar 

  • Ryan, L. V., & Schneider, M. (2002). The antecedents of institutional investor activism. Academy of Management Review, 27(4), 554–573.

    Google Scholar 

  • Sjöström, E. (2008). Shareholder activism for corporate social responsibility: What do we know? Sustainable Development, 16(3), 141–154. doi:10.1002/sd.361.

    Article  Google Scholar 

  • Sparkes, R., & Cowton, C. J. (2004). The maturing of socially responsible investment: A review of the developing link with corporate social responsibility. Journal of Business Ethics, 52(1), 45–57. doi:10.2307/25075231.

    Article  Google Scholar 

  • Spekman, R. E., Kamauff, J. W, Jr., & Myhr, N. (1998). An empirical investigation into supply chain management: A perspective on partnerships. Supply Chain Management: An International Journal, 3(2), 53–67.

    Article  Google Scholar 

  • Thomas, R. S., & Cotter, J. F. (2007). Shareholder proposals in the new millennium: Shareholder support, board response, and market reaction. Journal of Corporate Finance, 13(2–3), 368–391. doi:10.1016/j.jcorpfin.2007.02.002.

    Article  Google Scholar 

  • Thomas, R. S., Palmiter, A. R., & Cotter, J. F. (2012). Dodd-Frank’s say on pay: Will it lead to a greater role for shareholders in corporate governance? Cornell Law Review, 97(5), 1.

    Google Scholar 

  • Verspagen, B. (2007). Mapping technological trajectories as patent citation networks: A study on the history of fuel cell research. Advances in Complex Systems, 10(01), 93–115.

    Article  MATH  Google Scholar 

  • Vogel, D. (1983). Trends in shareholder activism: 1970–1982. California Management Review, 25(3), 68–87.

  • Wagemans, F. A., Koppen, C., & Mol, A. P. (2013). The effectiveness of socially responsible investment: A review. Journal of Integrative Environmental Sciences, 10(3–4), 235–252.

    Article  Google Scholar 

  • Wahal, S. (1996). Pension fund activism and firm performance. Journal of Financial and Quantitative Analysis, 31(01), 1–23.

    Article  Google Scholar 

  • Williams, C.C., & Crawford, E.P. (2011). Influencing climate change policy: The effect of shareholder pressure and firm environmental performance. Business & Society, 51(1), 149–175.

Download references

Acknowledgments

We thank the anonymous reviewers for their constructive comments, which have greatly improved the accuracy and readability of this article. This work is partially supported by Taiwan’s Ministry of Science and Technology Grants NSC 102-2410-H-011-008-MY3.

Author information

Authors and Affiliations

  1. Graduate Institute of Management, National Taiwan University of Science and Technology, 43, Section 4, Keelung Rd., Taipei, 10607, Taiwan

    Vincent C. Ma

  2. Graduate Institute of Technology Management, National Taiwan University of Science and Technology, 43, Section 4, Keelung Rd., Taipei, 10607, Taiwan

    John S. Liu

Authors
  1. Vincent C. Ma
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. John S. Liu
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to John S. Liu.

Ethics declarations

Conflict of interest

None.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Ma, V.C., Liu, J.S. Exploring the research fronts and main paths of literature: a case study of shareholder activism research. Scientometrics 109, 33–52 (2016). https://doi.org/10.1007/s11192-016-2035-x

Download citation

  • Received:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11192-016-2035-x

Keywords

Search

Navigation