The gains from takeover deregulation: Evidence from the end of interstate banking restrictions

• 成果类型: Article
• 署名作者: Brook, Y; Hendershott, R; Lee, D
• 署名单位: Santa Clara University; University System of Georgia; Kennesaw State University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.00087
• 发表日期: 1998
• 页码: 2185-2204
• 关键词: TARGET SHAREHOLDER WEALTH; corporate-control; BOARD COMPOSITION; tender offers; voting-rights; acquisitions; performance; IMPACT; MARKET; EFFICIENCY

摘要

This paper uses interstate banking deregulation to explore the benefits of takeover deregulation and how these benefits are distributed across different firms. We find large and significant abnormal returns around the Interstate Banking and Branching Efficiency Act of 1994 which imply it created $85 billion of value in the banking industry. Consistent with an active market for corporate control allowing beneficial consolidation and providing needed discipline, there is a strong negative relationship between banks' abnormal returns and their prior performance. Consistent with managerial entrenchment limiting takeover discipline, banks with higher insider ownership, lower outside block ownership, and/or less independent boards have lower abnormal returns.