Paper Title
The Impact of Shareholder Activism on Firm's Earning Persistence

Abstract
We empirically examined the impact of minority shareholders based on shareholder activism on firm's earnings management. Especially, we hypothesized minority shareholder's share ratio plays monitoring role on firm's management. And we examined our hypothesis whether minority shareholder affects firm's effective management and we considered it can be captured by firm's financial performance.The result of our empirical analysis is as follows. The minority shareholders' share ratio is higher equity and firm's earning persistence. We found the empirical result that if minority shareholder's share ratio is higher then firm's earnings persistence is lower. We also found the real impact of increasing the possibility to exert minority shareholder's influence to firm's earning persistence is actually decreases. And, these relationships are still hold after we control the year effect.These results are quite different from our common sense. But, this means minority shareholders are expect short term benefit rather than support firm's long term oriented investment or management. And this tendency is deepened by each shareholder's free-riding incentive. and this free-riding incentive is also increased by increasing minority shareholder's share ratio. Therefore, it can be interpreted when minority shareholder's share ratio is higher, their impact on firm's long-term management or performance is weaken because of free-riding incentive.The results that we empirically showed are meaningful. Because the impact of minority shareholders based on shareholder's activism have possibility to be used to exert not only for the interests of society but also for the interest of each minority shareholder itself. This can be explained by using sociological terminology that is 'embedded'. In the social research explains, when each individual person make a decision, he(she) considers interest both society and himself(herself). And it will not be an one-sided decision. And, until now, there is only a few empirical researches about this matter. But, this research came forth with empirical evidence to support a theoretical discussion. We therefore contribute and extend to prior theoretical studies by examining the argument and showing the empirical result.So far, shareholder activism is known as excessive pro-business or anti-business characteristic based on sociology. But, instead of prior perception about shareholder activism, we focus on as a social entity, how minority shareholder and their shareholder activism can influence on capital market. And, this study is differentiated with others because we empirically examined our hypotheses by using financial data rather than showing just sociological logic. Keywords : Minority shareholder, Earnings Persistence, Corporate Governance, Agency-Problem, Shareholder activism