Activist Investors Boost Companies, But Not Workers

Firms targeted by activist investors performed substantially better after three years, but workers at those plants didn’t see the benefits, according to a new study by researchers at Duke, Columbia, and Cornell. The paper reports that activist investors made firms more productive resulting in higher return on assets, and another study found they were also more innovative despite spending less on R&D. However, after three years wages at the more productive firms were still flat. The results of the study show the increasing disconnect between productivity and wages, one aspect driving inequality in the U.S. economy, the Harvard Business Review writes. “[T]he need to refocus the economy on long-term productivity is real. But as the data on activists demonstrates, that alone may not be enough to ensure that workers benefit.”