Managerial Discretion and Takeover Performance
AbstractWe investigate the relation between long run takeover performance and board share ownership in the acquiring company for a sample of 142 UK takeovers completed between 1985-95. We find evidence of a non-linear relationship both between board ownership and takeover profitability, and between board ownership and post-takeover share returns. We cast the analysis in a simultaneous equations framework using non- linear two-stage least squares, and find that our results are robust to this alternative specification. The results are therefore consistent with a managerial alignment / entrenchment trade-off.
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Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp216.
Date of creation: Sep 2001
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Web page: http://www.cbr.cam.ac.uk/
Corporate takeovers; board ownership; profitability; long run share returns;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-04-25 (All new papers)
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