Impact of Takeover Defenses on Managerial Incentives

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Abstract

The article studies how takeover defenses influence managerial incentives with respect to long term investments, excess liquidity and the amount of debt relative to equity. The article conducts a cross-sectional regression based on a sample of Danish listed firms, dealing explicitly with the problem of causation between the variables. Takeover defenses adopted by Danish firms mainly consist of shares with dual class voting rights often in combination with foundation ownership. The article finds that protected firms have significantly less debt to equity. However, protected firms are not significantly more oriented towards the long-term and do not have significantly more excess liquidity.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherInstitut for Finansiering, Copenhagen Business School
Number of pages36
ISBN (Print)8790705653
Publication statusPublished - 2002
SeriesWorking Papers / Department of Finance. Copenhagen Business School
Number2002-5
ISSN0903-0352

Keywords

  • Takeover defenses
  • Company law
  • Corporate control
  • Corporate governance
  • Simultaneous equation estimation

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