Professor Bainbridge...on law, politics, religion, culture & food

Institutional Investor Activism

I've generally been skeptical of institutional investor activism in the US, but I was impressed by Chao Xi's demonstration that institutional investors in China have played an important role in raising "corporate governance standards in China." Interestingly, however, Chinese investors face the same basic problem as US institutions; namely, "legal rules designed to protect minority shareholders have the unintended effect of deterring institutional shareholders from owning stakes substantial enough to influence corporate decision-making."