Engaged ETFs and firm performance

El Kalak, Izidin ORCID: https://orcid.org/0000-0002-2992-4042, Hudson, Robert and Tosun, Onur K. ORCID: https://orcid.org/0000-0003-2551-1408 2024. Engaged ETFs and firm performance. European Financial Management 30 (3) , pp. 1708-1765. 10.1111/eufm.12459

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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.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Additional Information:	License information from Publisher: LICENSE 1: URL: http://creativecommons.org/licenses/by/4.0/
Publisher:	Wiley
ISSN:	1354-7798
Date of First Compliant Deposit:	27 September 2023
Date of Acceptance:	1 June 2023
Last Modified:	04 Jul 2024 14:09
URI:	https://orca.cardiff.ac.uk/id/eprint/162780

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