The bonding hypothesis of takeover defenses: Evidence from IPO firms

• 成果类型: Article
• 署名作者: Johnson, William C.; Karpoff, Jonathan M.; Yi, Sangho
• 署名单位: Suffolk University; University of Washington; University of Washington Seattle; Sogang University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.03.008
• 发表日期: 2015
• 页码: 307-332
• 关键词: Antitakeover provisions; TAKEOVER DEFENSES; IPO; bonding

摘要

We propose and test an efficiency explanation for why Firms deploy takeover defenses using initial public offering (IPO) firm data. We hypothesize that takeover defenses bond the firm's commitments by reducing the likelihood that an outside takeover will change the firm's operating strategy and impose costs on its business partners. Consistent with this hypothesis, we find that IPO firms deploy more takeover defenses when they have important business relationships to protect. An IPO firm's use of takeover defenses is positively related to the longevity of its business relationships. IPO firms' use of takeover defenses creates positive spillovers for their large customers. And IPO firms' valuation and subsequent operating performance are positively related to their use of takeover defenses when they have important business relationships. (C) 2015 Elsevier B.V. All rights reserved.