Labor mobility and antitakeover provisions

• 成果类型: Article
• 署名作者: Dey, Aiyesha; White, Joshua T.
• 署名单位: Harvard University; Vanderbilt University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2021.101388
• 发表日期: 2021
• 关键词: CORPORATE GOVERNANCE; executive-compensation; golden parachutes; TAKEOVER DEFENSES; INFORMATION; performance; MARKET; COMPETITION; disclosure; AGREEMENTS

摘要

How do firms protect their human capital? We test whether firms facing an increased threat of being acquired strengthen their antitakeover provisions (ATPs) in order to bond with their employees. We use the adoption of the Inevitable Disclosure Doctrine (IDD) by US state courts, which exogenously decreases knowledge-worker mobility, thus elevating takeover risk and reducing employee incentives to innovate. Firms respond to the IDD adoption by strengthening ATPs that defend against hostile takeovers, especially when they have greater ex-ante employee mobility and human capital and place greater importance on employee relations. We find no evidence that managers strengthen ATPs for entrenchment or takeover bargaining purposes in this setting. Our findings show that ATPs can be used to credibly commit to employees in order to protect long-term value creation. 0 2021 Elsevier B.V. All rights reserved.