Corporate Governance and Firm Performance: The Role of Shareholder Activism in Emerging Markets

Corporate governance is crucial in enhancing competitiveness and attracting investment, particularly in emerging markets that face challenges such as complex regulatory environments and ownership structures. Shareholder activism has emerged as an essential mechanism for improving corporate accountability and performance. This study aims to analyze the impact of shareholder activism on corporate performance in emerging markets, considering corporate governance as a moderating variable. A quantitative approach is employed, utilizing panel data analysis from publicly listed companies in emerging markets over a period of 5 to 10 years. Corporate performance is measured using financial indicators such as Return on Assets (ROA), Return on Equity (ROE), and Tobin's Q, while shareholder activism is assessed based on the number of resolutions proposed in shareholder meetings. A panel regression model is applied to identify the relationships among the variables. The results indicate that shareholder activism has a significant positive impact on corporate performance, with a coefficient of 0.35 for ROA (p-value 0.001). Corporate governance acts as a moderator that strengthens this relationship, with an interaction coefficient of 0.10 (p-value 0.05). Overall, the regression model explains 78% of the variation in corporate performance (R-squared = 0.78). This study provides empirical evidence demonstrating that shareholder activism, supported by robust governance, can enhance corporate transparency and accountability in emerging markets. These findings are relevant for stakeholders aiming to promote better governance practices to sustainably enhance corporate competitiveness