Format:
1 Online-Ressource (56 p)
Content:
This study shows that trade creditors extend a negative response to hedge fund activism. Relative to control firms, target firms' accounts payable decreases by 28%, post activist intervention by hedge funds. This reduction is due to supply-side factors, highlighting suppliers' expropriation concerns. The study provides novel evidence that the repercussions of hedge fund activism extend beyond the formal debtholders, and informal debtholders such as trade creditors are not an exception. Further, target firms also offer lower trade credit to their customers after hedge fund activism. Trade receivables decrease by 12% relative to control firms. The findings suggest that activism-induced changes in operating cash flows, cash holdings and dividend payments potentially account for this reduction in trade receivables
Note:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 15, 2019 erstellt
Language:
English
DOI:
10.2139/ssrn.3751025
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