Collateral impact: how rivalry diffuses shareholder activism threats

This study examines how shareholder activism directed at rivals can indirectly influence the strategic actions of a non-targeted firm. Using the Awareness–Motivation–Capability (AMC) framework, we theorize that firms respond to consequential activism campaigns targeting their rivals by adjusting their competitive growth and social responsibility actions. We distinguish between financially motivated shareholder activism, which carries implicit disciplinary threats, and socially motivated shareholder activism, which carries implicit reputational threats. We argue that financially motivated activism at rivals triggers non-targeted firms to reduce both competitive growth and CSR actions, while socially motivated activism at rivals reduces growth but increases CSR actions of non-targeted firms. We further propose that the intensity of rivalry, shareholder composition and firm status moderate these relationships. We contribute to research on interorganizational diffusion, shareholder activism and social movements.