Are estimates of the impact of shareholder activism published selectively?

Shareholder activism constitutes an increasingly prominent feature of corporate governance landscape. There is a controversy in prior research over whether and how much value activism creates. We examine whether estimates of the impact of shareholder activism are published selectively in prior empirical research. We argue that economists may tend to view activism as a vital corporate governance tool to overcome agency problems and promote economic efficiency. Researchers and journal editors may thus be biased towards consider empirical results in support of the beneficial role of shareholder activism as more reliable than insignificant or opposite results. Consistent with this prediction we document a substantial bias towards publishing (i) higher (rather than lower) and (ii) statistically significant (rather than insignificant) estimates of the impact of shareholder activism. Due to that the pool of estimates in prior empirical literature is biased upwards. The value created by the various forms of shareholder activism corrected for these biases ranges from 0.38 to 3.23% with a median value of 1.94%.