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Do staggered boards harm shareholders?

Author

Listed:
  • Amihud, Yakov
  • Stoyanov, Stoyan

Abstract

We examine the Cohen and Wang (2013) conclusion that a staggered board lowers firm value based on the stock price reaction to two 2010 Delaware court rulings in the Airgas, Inc. case. The first ruling weakened the potency of a staggered board and the second restored it. We find that the Cohen and Wang results, for their sample, become insignificant after excluding a few penny stocks, stocks with value below $10 million, or over-the-counter (non-exchange) stocks. The effects of the rulings are also insignificant for an alternative sample.

Suggested Citation

  • Amihud, Yakov & Stoyanov, Stoyan, 2017. "Do staggered boards harm shareholders?," Journal of Financial Economics, Elsevier, vol. 123(2), pages 432-439.
  • Handle: RePEc:eee:jfinec:v:123:y:2017:i:2:p:432-439
    DOI: 10.1016/j.jfineco.2016.04.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Staggered board; Classified board; Corporate governance; Antitakeover measures; Takeover defense; Airgas;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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