Concentrating on Governance
This paper models product markets to develop a new test of the effect of corporate governance on firm value. We argue that the effect of corporate governance varies with the degree of concentration in the product markets. If our theory is correct, (1) firms in concentrated industries should be more likely to adopt takeover defenses; (2) takeover defenses should lead to higher takeover premiums, but only in concentrated industries; (3) takeover defenses should be associated with higher shareholder value, but only in concentrated industries. We test these and a number of ancillary predictions using a large sample of manufacturing firms over the 1990 to 2005 period and find robust support for our theory. Our results indicate that governance reforms directed toward weakening takeover defenses may come with benefits, but also with costs.
Dalida Kadyrzhanova Matthew Rhodes-Kropf
University of Maryland Columbia University
国际会议
成都
英文
2007-07-09（万方平台首次上网日期，不代表论文的发表时间）