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Engaged ETFs and firm performance

El Kalak, Izidin; Hudson, Robert; Kemal Tosun, Onur

Authors

Izidin El Kalak

Robert Hudson

Onur Kemal Tosun



Abstract

Exchange Traded Funds (ETFs) have often tracked indices and charged low fees so their incentives to improve firm performance are questionable although little empirical work has investigated this issue. Theoretically, however, we expect firms to perform better when held by more engaged ETFs. We develop a new measure of engagement using a weighted-average concentration measure which captures the combined effect of the concentration of the portfolios of the ETFs investing in a firm and the ownership of the firm by those ETFs. Using ETFs' investment in US-listed firms for the period 2000–2019, we confirm our expectations that more engaged ETFs improve firm performance.

Citation

El Kalak, I., Hudson, R., & Kemal Tosun, O. (2023). Engaged ETFs and firm performance. European Financial Management, https://doi.org/10.1111/eufm.12459

Journal Article Type Article
Acceptance Date Jun 1, 2023
Online Publication Date Sep 26, 2023
Publication Date Jan 1, 2023
Deposit Date Sep 14, 2023
Publicly Available Date Sep 26, 2023
Journal European Financial Management
Print ISSN 1354-7798
Publisher Wiley
Peer Reviewed Peer Reviewed
DOI https://doi.org/10.1111/eufm.12459
Keywords Corporate governance; Exchange Traded Funds (ETFs); Firm performance; Monitoring; Portfolio concentration
Public URL https://hull-repository.worktribe.com/output/4387953

Files

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Publisher Licence URL
http://creativecommons.org/licenses/by/4.0

Copyright Statement
© 2023 The Authors. European Financial Management published by John Wiley & Sons Ltd.
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and
reproduction in any medium, provided the original work is properly cited.





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