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Leader‐Follower Dynamics in Shareholder Activism

Doruk Cetemen et al.

The Journal of Finance2026https://doi.org/10.1111/jofi.70033article
FT50UTD24AJG 4*ABDC A*
Weight
0.50

Abstract

We propose a theory of coordination and influence among blockholders. Privately informed activists time their trades in sequence to lower acquisition costs, prompting a strategic use of order flows: leader activists create trading gains for their followers, ultimately influencing their willingness to bear greater value‐enhancing intervention costs. Through this channel, informed trades can exhibit predictability, in sharp contrast with Kyle (1985, Econometrica 53, 1315–1335). We explain how this novel predictability shapes free‐rider problems affecting governance, and how it produces price abnormalities analogous to those documented empirically. We also uncover how private information interdependence can be a key catalyst for the mechanism studied.

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https://doi.org/https://doi.org/10.1111/jofi.70033

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@article{doruk2026,
  title        = {{Leader‐Follower Dynamics in Shareholder Activism}},
  author       = {Doruk Cetemen et al.},
  journal      = {The Journal of Finance},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/jofi.70033},
}

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Leader‐Follower Dynamics in Shareholder Activism

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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