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    Emerging aspects of shareholder activism : a dissertation presented in partial fulfillment of the requirements for the degree of Doctoral of Philosophy in Finance at Massey University, Manawatu (Turitea), New Zealand
    (Massey University, 2021) Hafeez, Bilal
    This thesis consists of one comprehensive literature review and two empirical essays on shareholder activism. The literature review on shareholder activism provides a brief discussion on shareholder activism’s evolution, highlighting the potential of retail investors’ participation in tipping the balance between the activist and the firm. Furthermore, it provides evidence on the activist institutional investors, including the traditional institutional investors such as pension funds and mutual funds, and hedge funds as the latest emerging activists. The literature review identifies some potential for research areas in light of the growing interest in shareholder activism. This thesis further includes two empirical studies on retail investors and activist hedge funds, respectively. The first essay examines retail investors’ attention and participation during shareholder activism with the proliferation of internet from 1990s. This study finds a significant increase in retail investors’ attention before the annual general meetings, leading to a subsequent increase in retail investors’ participation in the voting process, especially among proposals that resonate with retail investors’ preferences. This increase is more pronounced for less transparent firms than transparent firms. Empirical evidence also suggests that retail investors’ attention has a more pronounced increase for proposals with a more controversial tone. Overall, this study provides new insights into information technology’s role in mitigating retail investors’ apathy issues. The second essay focuses on hedge fund activism, and it is the first study to document the impact of hedge fund activism on firm risk-taking behaviors. This study provides evidence that firms targeted by activist hedge funds, which tend to maximize short-term profits, experience a significant reduction in risk-taking in the long-term. This reduction in risk-taking is more pronounced for myopic and opaque firms. This study also provides new evidence on the impact of target’s response on activism outcomes. Management’s hostile resistance would offset the initial effect of activism on target firms. Overall, this study provides important implications that activist hedge funds might not fulfil the role of monitoring as suggested in existing corporate governance literature. The results provide new insights to academics and regulators by adding to the debate on the costs and benefits of activism for the economy.
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    Essays on household finance and individual investor behaviour : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance, Massey University
    (Massey University, 2014) Zhang, Annie Claire
    This dissertation studies factors that influence individual investor behaviour using two unique proprietary datasets which cover the investment fund choices, fund switches and asset allocation decisions for over 600,000 individual investors in New Zealand. The first study looks at return chasing. I investigate whether investors use past returns to choose funds during a period with particularly volatile returns, before and after the 2008 Global Financial Crisis. The findings suggest that investors chase returns and investors are affected by past quarterly, half-yearly and annual returns. Funds with positive past returns see more investors choose their fund, while funds with negative returns see investors leave their fund. The second study explores the role of financial advice on asset allocation. I find that people who receive financial advice invest significantly more in equity. Women, older and wealthier investors are more likely to receive advice than others. However, the differences in returns of people who receive advice and those that do not, are marginal. I investigate the impact of financial advice differently to previous studies which use brokers, dealers, bank-employees and computer generated algorithms. I show that using personal, face-to-face financial advice result in different findings. The third study tests the relative importance of personal characteristics, peer effects and financial advice on asset allocation. Surprisingly, household peer effects rather than personal characteristics dominate investment decisions. In fact, all peer effects combined (household effects, work place effects and neighbourhood effects) are twice as important as personal characteristics.