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Shareholder Activism: Telecommunication Industry In Turkey

Year 2017, Volume: 39 Issue: 1, 101 - 116, 19.07.2017
https://doi.org/10.14780/muiibd.329905

Abstract

Shareholders began to play an active role in diminishing the growing agency costs due to recent

financial crisis, poor corporate governance and excessive executive compensations. They act as

individual and corporate forms in order to protect their investment and increase firm value.

Nowadays, social activities of the past have changed to replace the general manager, overcome the

duality problem, elect a board member other than the management candidates, vote for acquisition

or sale decisions, and dividend distribution. The ownership structure in Turkey is generally composed

of families or individuals who do not act aggressively as the hedge funds in USA. The sales of Turkish

companies’ shares to foreign shareholders, introduction of international investment funds in the local

market, and electronic general meeting system introduced a few years ago contribute to shareholder

activism in Turkey. Shareholder struggles are witnessed only in the Turkish stock market which is

quoted in the NYSE. In this study, the two publicly traded companies in the telecommunication

sector, namely Türk Telekom and Turkcell, are examined in terms of their financial situation, the

acceptance rate of the propositions of the management in the general meetings, and the behavior

of their share prices. Shareholder activism is not seen in the Telekom, whereas there have been

trials and regulation changes for Turkcell. In terms of accounting-based data, Türk Telekom has a

lower operational profitability and current ratio as compared to Turkcell. It is concluded that the

level of shareholder activism occurred in the general meetings does not affect the share prices. Both

companies’ shares moved in high correlation during the last three years. The share prices did not show

abnormal patterns during the days following the general meetings. The reasons might be the growth

of the telecommunication industry being above the national growth rate and the positive evaluations

of the shareholders’ decisions by the investors for the future of the firm.

References

  • Activist Insight, Activist Investing Review, 2016, s. 9-10.
  • ARMOUR, John and Cheffins, Brian, “The Rise and Fall (?) of Shareholder Activism by Hedge Funds”, Journal of Alternative Investments, 14 (3), 2012, s. 17-27.
  • BLACK, Josh, Activist Investing 2016, www.activistinsight.com
  • BLACK, Josh, The Activist Investing Annual Review 2017, Harvard Law School Forum on Corporate Governance and Financial Regulation, Feb. 21, 2017.
  • BLACK, Bernard S., “Shareholder activism and corporate governance in the United States”, In: Newman, Peter (Ed.), The New Palgrave Dictionary of Economics and the Law, 3, 1998, s. 459-465.
  • BRAV, Alon and Jiang, Wei and Kim, Hyunseob, “Hedge Fund Activism: A Review. Foundations and Trends in Finance”, 4 (3), 2009, s. 185-246.
  • CHUNG, Huimin and Talaulicar, Till, “Forms and effects of shareholder activism”, Corporate Governance: An International Review, 18 (4), 2010, s. 253-257.
  • COHN, Jonathan B. and Gillan, Stuart L. and Hartzell, Jay C., “On Enhancing Shareholder Control: A (Dodd-) Frank Assessment of Proxy Access, The Journal of Finance, 71 (4), 2016, s. 1623-1668.
  • COPLAND, James R., The Push for Proxy Access Continues, Proxy Monitor Report, Manhattan Institute, 2016.
  • DENES, Matthew R. and Karpoff, Jonathan M. and McWilliams, Victoria B., “Thirty years of shareholder activism: A survey of empirical research”, Journal of Corporate Finance, in press, 2017.
  • ERGİN, Emre, “Does Excessive Executive Compensation Really Pay Shareholders?”, Academy of Accounting and Financial Studies Journal, 17 (1), 2013, s. 47-56.
  • ERGİNCAN, Yakup and Karaağaçlı, Bora, “How Electronic General Meetings Affected Exercise of Shareholder Rights in Turkey: An Analysis of the Turkish Model in Light of International Market Standards and Regulations”, Boğaziçi Journal Review of Social, Economic and Administrative Studies, 29 (1), 2015, s. 95-117.
  • ERTIMUR, Yonca and Ferri, Fabrizio and Muslu, Volkan, “Shareholder Activism and CEO Pay”, The Review of Financial Studies, 24 (2), 2011, s. 535-592.
  • FERRI, Fabrizio and Oesch, David, “Management Influence on Investors: Evidence from Shareholder Votes on the Frequency of Say on Pay”, Contemporary Accounting Research, 33 (4), 2016, s. 1337-1374.
  • FOS, Vyecheslav, The Disciplinary Effects of Proxy Contests, Working paper, Columbia University, 2011.
  • GANTCHEV, Nickolay, “The Costs of Shareholder Activism: Evidence from a Sequential Decision Model”, Journal of Financial Economics, 107 (3), 2013, s. 610-631.
  • LOW, Chee K., “A Road Map for Corporate Governance in East Asia”, Northwestern Journal of International Business Law, 25, 2004, s. 165-203.
  • PREVOST, Andrew K. and Wongchoti, Udomsak and Marshall, Ben R., “Does institutional shareholder activism stimulate corporate information flow?”, Journal of Banking and Finance, 70, 2016, s. 105-117.
  • SJÖSTRÖM, Emma, “Shareholder Activism for Corporate Social Responsibility: What Do We Know?”, Sustainable Development, 16 (3), 2008, s. 141-154.
Year 2017, Volume: 39 Issue: 1, 101 - 116, 19.07.2017
https://doi.org/10.14780/muiibd.329905

Abstract

References

  • Activist Insight, Activist Investing Review, 2016, s. 9-10.
  • ARMOUR, John and Cheffins, Brian, “The Rise and Fall (?) of Shareholder Activism by Hedge Funds”, Journal of Alternative Investments, 14 (3), 2012, s. 17-27.
  • BLACK, Josh, Activist Investing 2016, www.activistinsight.com
  • BLACK, Josh, The Activist Investing Annual Review 2017, Harvard Law School Forum on Corporate Governance and Financial Regulation, Feb. 21, 2017.
  • BLACK, Bernard S., “Shareholder activism and corporate governance in the United States”, In: Newman, Peter (Ed.), The New Palgrave Dictionary of Economics and the Law, 3, 1998, s. 459-465.
  • BRAV, Alon and Jiang, Wei and Kim, Hyunseob, “Hedge Fund Activism: A Review. Foundations and Trends in Finance”, 4 (3), 2009, s. 185-246.
  • CHUNG, Huimin and Talaulicar, Till, “Forms and effects of shareholder activism”, Corporate Governance: An International Review, 18 (4), 2010, s. 253-257.
  • COHN, Jonathan B. and Gillan, Stuart L. and Hartzell, Jay C., “On Enhancing Shareholder Control: A (Dodd-) Frank Assessment of Proxy Access, The Journal of Finance, 71 (4), 2016, s. 1623-1668.
  • COPLAND, James R., The Push for Proxy Access Continues, Proxy Monitor Report, Manhattan Institute, 2016.
  • DENES, Matthew R. and Karpoff, Jonathan M. and McWilliams, Victoria B., “Thirty years of shareholder activism: A survey of empirical research”, Journal of Corporate Finance, in press, 2017.
  • ERGİN, Emre, “Does Excessive Executive Compensation Really Pay Shareholders?”, Academy of Accounting and Financial Studies Journal, 17 (1), 2013, s. 47-56.
  • ERGİNCAN, Yakup and Karaağaçlı, Bora, “How Electronic General Meetings Affected Exercise of Shareholder Rights in Turkey: An Analysis of the Turkish Model in Light of International Market Standards and Regulations”, Boğaziçi Journal Review of Social, Economic and Administrative Studies, 29 (1), 2015, s. 95-117.
  • ERTIMUR, Yonca and Ferri, Fabrizio and Muslu, Volkan, “Shareholder Activism and CEO Pay”, The Review of Financial Studies, 24 (2), 2011, s. 535-592.
  • FERRI, Fabrizio and Oesch, David, “Management Influence on Investors: Evidence from Shareholder Votes on the Frequency of Say on Pay”, Contemporary Accounting Research, 33 (4), 2016, s. 1337-1374.
  • FOS, Vyecheslav, The Disciplinary Effects of Proxy Contests, Working paper, Columbia University, 2011.
  • GANTCHEV, Nickolay, “The Costs of Shareholder Activism: Evidence from a Sequential Decision Model”, Journal of Financial Economics, 107 (3), 2013, s. 610-631.
  • LOW, Chee K., “A Road Map for Corporate Governance in East Asia”, Northwestern Journal of International Business Law, 25, 2004, s. 165-203.
  • PREVOST, Andrew K. and Wongchoti, Udomsak and Marshall, Ben R., “Does institutional shareholder activism stimulate corporate information flow?”, Journal of Banking and Finance, 70, 2016, s. 105-117.
  • SJÖSTRÖM, Emma, “Shareholder Activism for Corporate Social Responsibility: What Do We Know?”, Sustainable Development, 16 (3), 2008, s. 141-154.
There are 19 citations in total.

Details

Subjects Economics
Journal Section Makaleler
Authors

Emre Ergin

İlkay Ejder Erturan This is me

Publication Date July 19, 2017
Submission Date July 20, 2017
Published in Issue Year 2017 Volume: 39 Issue: 1

Cite

APA Ergin, E., & Erturan, İ. E. (2017). Shareholder Activism: Telecommunication Industry In Turkey. Marmara Üniversitesi İktisadi Ve İdari Bilimler Dergisi, 39(1), 101-116. https://doi.org/10.14780/muiibd.329905
AMA Ergin E, Erturan İE. Shareholder Activism: Telecommunication Industry In Turkey. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. July 2017;39(1):101-116. doi:10.14780/muiibd.329905
Chicago Ergin, Emre, and İlkay Ejder Erturan. “Shareholder Activism: Telecommunication Industry In Turkey”. Marmara Üniversitesi İktisadi Ve İdari Bilimler Dergisi 39, no. 1 (July 2017): 101-16. https://doi.org/10.14780/muiibd.329905.
EndNote Ergin E, Erturan İE (July 1, 2017) Shareholder Activism: Telecommunication Industry In Turkey. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi 39 1 101–116.
IEEE E. Ergin and İ. E. Erturan, “Shareholder Activism: Telecommunication Industry In Turkey”, Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, vol. 39, no. 1, pp. 101–116, 2017, doi: 10.14780/muiibd.329905.
ISNAD Ergin, Emre - Erturan, İlkay Ejder. “Shareholder Activism: Telecommunication Industry In Turkey”. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi 39/1 (July 2017), 101-116. https://doi.org/10.14780/muiibd.329905.
JAMA Ergin E, Erturan İE. Shareholder Activism: Telecommunication Industry In Turkey. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. 2017;39:101–116.
MLA Ergin, Emre and İlkay Ejder Erturan. “Shareholder Activism: Telecommunication Industry In Turkey”. Marmara Üniversitesi İktisadi Ve İdari Bilimler Dergisi, vol. 39, no. 1, 2017, pp. 101-16, doi:10.14780/muiibd.329905.
Vancouver Ergin E, Erturan İE. Shareholder Activism: Telecommunication Industry In Turkey. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. 2017;39(1):101-16.

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