Publication: Activist Hedge Funds and Takeovers Their Effects on Employment and Performance
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Date
2022-01
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Wiley
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Abstract
This paper analyses the impact of activist hedge funds (AHFs) on post-merger workforce downsizing and operating performance. AHFs have been widely criticized for achieving short-term gains at the expense of other stakeholders, such as employees. The results show that AHF ownership and presence in acquiring firms is a significant determinant of post-merger employment reductions. There is little evidence that these mergers and acquisitions have better operating performance relative to other takeovers. However, there is a negative effect of AHF ownership on labour productivity. Overall, the results are consistent with the view that AHF involvement in takeovers does not lead to sustained gains in performance.
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Attribution-NonCommercial-NoDerivatives 4.0 International
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IE Business School
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Kuvandikov, A., Pendleton, A., & Goergen, M. (2022). Activist hedge funds and takeovers: Their effects on employment and performance. British Journal of Management, 33(1), 346-368. https://doi.org/10.1111/1467-8551.12507.