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Staggered boards, corporate opacity and firm value

Author

Listed:
  • Duru, Augustine
  • Wang, Dechun
  • Zhao, Yijiang

Abstract

We explore the effect of corporate opacity on the relation between staggered boards and firm value. We find that through mitigating takeover pressure, staggered boards become increasingly beneficial to firm value as opacity increases. In addition, we document that staggered boards reduce value only in transparent firms. Additional tests indicate that, as opacity increases, staggered boards bear an increasingly positive relation to research and development and CEO pay-performance sensitivity. Taken together, these results suggest that corporate opacity affects the value impact of takeover protection.

Suggested Citation

  • Duru, Augustine & Wang, Dechun & Zhao, Yijiang, 2013. "Staggered boards, corporate opacity and firm value," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 341-360.
  • Handle: RePEc:eee:jbfina:v:37:y:2013:i:2:p:341-360
    DOI: 10.1016/j.jbankfin.2012.09.002
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    References listed on IDEAS

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    Cited by:

    1. Hongchao Zeng, 2014. "Financial Constraints, Antitakeover Protection, and Corporate Innovation: An Empirical Analysis using Antitakeover Legislation," Review of Economics & Finance, Better Advances Press, Canada, vol. 4, pages 1-15, August.

    More about this item

    Keywords

    Staggered boards; Antitakeover provisions; Corporate opacity; Performance;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • K2 - Law and Economics - - Regulation and Business Law

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