Gerald T. Garvey (Commerce and Business Administration, University of British Columbia,) Gordon Hanka (Smeal College of Business Administration, Pennsylvania State University)
Abstract
We find that firms protected by "second generation" state antitakeover laws substantially reduce their use of debt, and that unprotected firms do the reverse. This result supports recent models in which the threat of hostile takeover motivates managers to take on debt they would otherwise avoid. An implication is that legal barriers to takeovers may increase corporate slack. Copyright The American Finance Association 1999.
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Roosenboom, P.G.J. & Goot, T. van der, 2003.
"Takeover defenses and IPO firm value in the Netherlands,"
Research Paper
ERS-2003-049-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
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