The Dark Side of Minority Shareholder Activism on R&D Investment: Perspective of Managers' Pressure Perception

Abstract

This study examines whether and how negative online postings (NOPs), a prevalent form of minority shareholder activism, influence corporate innovation input. Using data from Chinese investor interactive platforms, we find that NOPs negatively impact corporate R&D investment, particularly when these postings are short-term focused. Channel tests suggest that this effect is driven by pressures regarding stock price decline, takeover possibility, and management turnover. The negative relationship is more pronounced when NOPs represent stronger pressure, when board secretaries are in more influential positions, and when CEOs are more susceptible to short-term pressure. Our findings suggest that NOPs increase managers' perception of pressure and drive managers to prioritize immediate returns over strategic risk-taking. This study advances the understanding of minority shareholder activism by revealing its detrimental impact on R&D investment.