The Life Cycle Effects of Corporate Takeover Defenses

• 成果类型: Article
• 署名作者: Johnson, William C.; Karpoff, Jonathan M.; Yi, Sangho
• 署名单位: University of Massachusetts System; University of Massachusetts Lowell; University of Washington; University of Washington Seattle; Sogang University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab113
• 发表日期: 2022
• 页码: 2879
• 关键词: ANTITAKEOVER PROTECTION; SHAREHOLDER RIGHTS; golden parachutes; ANALYST COVERAGE; AGENCY COSTS; Firm value; governance; OWNERSHIP; equity; MARKET

摘要

We document that the relation between firm value and the use of takeover defenses is positive for young firms but becomes negative as firms age. This value reversal pattern reflects specific changes in the costs and benefits of takeover defenses as firms age and arises because defenses are sticky and rarely removed. Firms can attenuate the value reversal by removing defenses, but do so only when the defenses become very costly and adjustment costs are low. The value reversal explains previous mixed evidence about takeover defenses and implies that firm age proxies for takeover defenses' heterogeneous impacts on firm value.