Hedge Fund Activism, Corporate Governance, and Firm Performance

Interesting long term study of the affects of activism linking it to returns of stocks.  

Link to Paper

Hedge Fund Activism, Corporate Governance, and Firm Performance
Alon Brav, Wei Jiang, Frank Partnoy, and Randall Thomas*
ABSTRACT
Using a large hand-collected dataset from 2001 to 2006, we find that activist hedge funds in the U.S. propose strategic, operational, and financial remedies and attain success or partial success in two thirds of the cases. Hedge funds seldom seek control and in most cases are nonconfrontational. The abnormal return around the announcement of activism is approximately 7%, with no reversal during the subsequent year. Target firms experience increases in payout, operating performance, and higher CEO turnover after activism. Our analysis provides important new evidence on the mechanisms and effects of informed shareholder monitoring.