Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • May 2017
  • Article
  • Review of Financial Studies

Distracted Shareholders and Corporate Actions

By: Elisabeth Kempf, Alberto Manconi and Oliver Spalt
  • Format:Electronic
ShareBar

Abstract

Investor attention matters for corporate actions. Our new identification approach constructs firm-level shareholder "distraction" measures, by exploiting exogenous shocks to unrelated parts of institutional shareholders' portfolios. Firms with "distracted" shareholders are more likely to announce diversifying, value-destroying, acquisitions. They are also more likely to grant opportunistically-timed CEO stock options, more likely to cut dividends, and less likely to fire their CEO for bad performance. Firms with distracted shareholders have abnormally low stock returns. Combined, these patterns are consistent with a model in which the unrelated shock shifts investor attention, leading to a temporary loosening of monitoring constraints.

Keywords

Investors; Business and Shareholder Relations; Executive Compensation; Stocks; Mergers and Acquisitions

Citation

Kempf, Elisabeth, Alberto Manconi, and Oliver Spalt. "Distracted Shareholders and Corporate Actions." Review of Financial Studies 30, no. 5 (May 2017): 1660–1695.

Supplemental Information

Data
Internet Appendix
  • Read Now

About The Author

Elisabeth Kempf

Finance
→More Publications

More from the Authors

    • June 2023
    • Faculty Research

    Optimalen Capital Spreadsheet Supplement

    By: Malcolm Baker, Elisabeth Kempf and Jonathan Wallen
    • June 2023
    • Faculty Research

    Optimalen Capital

    By: Malcolm Baker, Elisabeth Kempf and Jonathan Wallen
    • May 2023
    • Journal of Financial Economics

    Political Ideology and International Capital Allocation

    By: Elisabeth Kempf, Mancy Luo, Larissa Schäfer and Margarita Tsoutsoura
More from the Authors
  • Optimalen Capital Spreadsheet Supplement By: Malcolm Baker, Elisabeth Kempf and Jonathan Wallen
  • Optimalen Capital By: Malcolm Baker, Elisabeth Kempf and Jonathan Wallen
  • Political Ideology and International Capital Allocation By: Elisabeth Kempf, Mancy Luo, Larissa Schäfer and Margarita Tsoutsoura
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College