Does corporate governance matter in competitive industries?

• 成果类型: Article
• 署名作者: Giroud, Xavier; Mueller, Holger M.
• 署名单位: New York University; National Bureau of Economic Research; Centre for Economic Policy Research - UK; European Corporate Governance Institute
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2009.10.008
• 发表日期: 2010
• 页码: 312-331
• 关键词: CORPORATE GOVERNANCE; Product market competition; Anti-takeover legislation

摘要

By reducing the threat of a hostile takeover, business combination (BC) laws weaken corporate governance and increase the opportunity for managerial slack. Consistent with the notion that competition mitigates managerial slack, we find that while firms in non-competitive industries experience a significant drop in operating performance after the laws' passage, firms in competitive industries experience no significant effect. When we examine which agency problem competition mitigates, we find evidence in support of a quiet-life hypothesis. Input costs, wages, and overhead costs all increase after the laws' passage, and only so in non-competitive industries. Similarly, when we conduct event studies around the dates of the first newspaper reports about the BC laws, we find that while firms in non-competitive industries experience a significant stock price decline, firms in competitive industries experience a small and insignificant stock price impact. (C) 2009 Elsevier B.V. All rights reserved.