Researcher ORCID Identifier


Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Eric Hughson

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It is well known that firms targeted by activist hedge funds experience positive abnormal stock returns during the campaign announcement window. However, the link between these short-term returns and the impact to long-term target firm performance has not been established. In this study, I find essentially no link between the positive announcement window returns and long-term performance improvements, using a variety of different methods. I examine performance changes over time and also relative to a matched sample of firms that have not been targeted by activist hedge funds. Additionally, I assess the correlation between the magnitude of short-term abnormal stock returns and long-term performance changes, finding no correlation. Finally, I repeat all the analysis for a sub-sample of campaigns initiated by the top 10 activist hedge funds. Although the firms targeted by these hedge funds are more successful pre-intervention and experience a statistically significant higher abnormal stock return, the long-term results for this sub-sample are economically and statistically insignificant as well. In aggregate, I find that activist hedge fund campaigns have no economic effect on the long-term performance of target firms, despite the large positive market reaction to campaign announcements.