Does Takeover Activity Cause Managerial Discipline? Evidence from International M&A Laws

• 成果类型: Article
• 署名作者: Lel, Ugur; Miller, Darius P.
• 署名单位: Virginia Polytechnic Institute & State University; Southern Methodist University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhv002
• 发表日期: 2015
• 页码: 1588
• 关键词: TOP EXECUTIVE TURNOVER; corporate governance; Investor protection; firm performance; institutional investors; Agency problems; ceo turnover; OWNERSHIP; MARKET; COMPENSATION

摘要

This paper exploits the staggered initiation of takeover laws across countries to examine whether the threat of takeover enhances managerial discipline. We show that following the passage of takeover laws, poorly performing firms experience more frequent takeovers; the propensity to replace poorly performing CEOs increases, especially in countries with weak investor protection; and directors of targeted firms are more likely to lose board seats following corporate-control events. Our findings suggest that the threat of takeover causes managerial discipline through the incentives that the market for corporate control provides to boards to monitor managers.