Shareholder Activism and Financial Performance: A Study of Publicly Listed Companies

Kexin Zhang

doi:10.71222/4z0gmx09

Authors

Kexin Zhang School of Business, University of Illinois at Urbana-Champaign, Champaign, Illinois, 61820, USA Author

DOI:

https://doi.org/10.71222/4z0gmx09

Keywords:

shareholder activism, financial performance, corporate governance, empirical study, listed companies

Abstract

This study employs panel data from publicly listed companies in the A-share and H-share markets over the period 2015–2022 to examine the mechanisms by which shareholder activism affects corporate financial performance. We identify representative activism events using an event-study approach and then estimate fixed-effects regression models. Financial performance is measured through multiple indicators—return on equity (ROE), return on assets (ROA), and earnings per share (EPS). Controlling for industry, firm size, and macroeconomic fluctuations, our empirical results show that shareholder activism significantly enhances target firms’ short-term profitability and operates through channels such as improved governance structure and greater disclosure transparency. In the long run, activism also exerts a positive effect on market valuation and investment returns. These findings enrich the intersection of corporate governance and financial management literature and offer empirical guidance for regulators to strengthen shareholder‐rights protections and encourage rational participation.

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