Impact of Shareholders’ Activism on the Performance of Banks in India: A Panel Data Application

Shailesh Rastogi, Kuldeep Singh and Jagjeevan Kanoujiya

Business Perspectives and Research, 2024, vol. 12, issue 1, 83-99

Abstract: There is a widespread uncertainty regarding the usefulness of shareholder activism (SA) as a part of corporate governance for firms and banks. SA has wide acceptance across the board among all the stakeholders’ participation. Since banks are the backbone of any economy, any endeavor (support to SA) creating difficulty may boomerang. Such actions do more harm than good; therefore, it is imperative to determine whether SA is beneficial to the banks or not. In this study, the SA index is built for Indian banks. The data relating to bank performance and valuation is gathered for 2016–2019. Panel data econometrics is applied to determine the impact of SA on banks performance. Results reveal that SA impacts bank performance. Furthermore, transparency and disclosure significantly moderates the association of SA with the performance. However, SA is not impacting bank valuation. It is a unique study of its kind to provide insights on SA for the banking sector.

Keywords: Banks; shareholder activism; stakeholders’ participation; transparency and disclosures; valuation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:busper:v:12:y:2024:i:1:p:83-99

DOI: 10.1177/22785337221148582

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