PhD Defence Ruud Kuijpers

In his dissertation, The Effect of Shareholder Activism on Corporate Divestments, ERIM's Ruud Kuijpers investigated the dynamics of activist investor-driven corporate divestments and provided insights into how management can retain the mandate for strategic portfolio decisions under shareholder pressure. Activist investors have emerged as a significant force in financial markets, particularly concerning excessively diversified firms. These firms often struggle to optimize their corporate portfolios for shareholder value, leading to diminished financial performance and a diversification discount in the markets. Activist investors aim to address these inefficiencies by advocating for the divestment of unrelated assets, thereby alleviating agency costs associated with excessive diversification and enhancing overall shareholder returns.

Ruud defended his dissertation in the Senate Hall at Erasmus University Rotterdam (EUR) on Thursday, 12 September at 13:00. His supervisors were prof. dr. Hans van Oosterhout (EUR), dr. Marc Baaij (EUR), and dr. René Bakker (EUR).

Activist investors have become an established disciplinary force on financial markets through performing a monitoring function, and targeting excessively diversified firms. The management of excessively diversified firms exposes the firm to shareholder activism as it is not optimising the corporate portfolio for shareholder value creation. The reduced corporate focus of excessively diversified firms generally results in a lower financial performance of the firm, which is often reflected in a diversification discount on financial markets. Activist investors attempt to release these locked-in agency costs resulting from excessive diversification and increase total shareholder returns through proposing the divestment of unrelated corporate assets as a corrective measure for excessive diversification in the corporate portfolio. The empirical investigation in this dissertation explores the phenomenon of activist investor induced corporate divestments, and explains how management can retain the mandate for strategic portfolio decisions under shareholder pressure.

View photos of Ruud's PhD Defence

Photos: Michelle Muus / Michelle Muus Fotografie