Managers, Workers and Corporate Control
If the private benefits of control are high and management owns a small equity stake, managers and workers are natural allies. Two forces are at play. First, managers can transform employees into a 'poison pill' through generous long-term labour contracts and thereby reduce the firm’s attractiveness to a raider. Second, employees act as 'white squires' for the incumbent managers: to protect their high wages, they resist hostile takeovers, by refusing to sell their shares to the raider or by lobbying against the takeover. The model is consistent with available empirical findings, and also yields new predictions.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Nov 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marianne Bertrand & Sendhil Mullainathan, 1999.
"Is There a Discretion in Wage Setting? A Test Using Takeover Legislation,"
RAND Journal of Economics,
The RAND Corporation, vol. 30(3), pages 535-554, Autumn.
- Bertrand, M. & Mullainathan, S., 1998. "Is there Discretion in Wage Setting? A Test Using Takeover Legislation," Papers 203, Princeton, Woodrow Wilson School - Public and International Affairs.
- Sendhil Mullainathan & Marianne Bertrand, 1998. "Is there Discretion in Wage Setting? A Test Using Takeover Legislation," Working papers 98-19, Massachusetts Institute of Technology (MIT), Department of Economics.
- Marianne Bertrand & Sendhil Mullainathan, 1998. "Is There Discretion in Wage Setting? A Test Using Takeover Legislation," Working Papers 785, Princeton University, Department of Economics, Industrial Relations Section..
- Marianne Bertrand & Sendhil Mullainathan, 1998. "Is There Discretion in Wage Setting? A Test Using Takeover Legislation," NBER Working Papers 6807, National Bureau of Economic Research, Inc.
- Bertrand, Marianne & Mullainathan, Sendhil, 2003.
"Enjoying the Quiet Life? Corporate Governance and Managerial Preferences,"
3429713, Harvard University Department of Economics.
- Marianne Bertrand & Sendhil Mullainathan, 2003. "Enjoying the Quiet Life? Corporate Governance and Managerial Preferences," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1043-1075, October.
- Betton, Sandra & Eckbo, B Espen, 2000. "Toeholds, Bid Jumps, and Expected Payoffs in Takeovers," Review of Financial Studies, Society for Financial Studies, vol. 13(4), pages 841-82.
- Sanford J. Grossman & Oliver D. Hart, 1980. "Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 42-64, Spring.
- Calvo, Guillermo A & Wellisz, Stanislaw, 1978. "Supervision, Loss of Control, and the Optimum Size of the Firm," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 943-52, October.
- Gary Gorton & Frank Schmid, 2000.
"Class Struggle Inside the Firm: A Study of German Codetermination,"
NBER Working Papers
7945, National Bureau of Economic Research, Inc.
- Gary Gorton & Frank Schmid, 2000. "Class Struggle Inside the Firm: A Study of German Codetermination," Center for Financial Institutions Working Papers 00-36, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Gary Gorton & Frank Schmid, 2002. "Class struggle inside the firm: a study of German codetermination," Working Papers 2000-025, Federal Reserve Bank of St. Louis.
- Andrei Shleifer & Lawrence H. Summers, 1988.
"Breach of Trust in Hostile Takeovers,"
in: Corporate Takeovers: Causes and Consequences, pages 33-68
National Bureau of Economic Research, Inc.
- Beatty, Anne, 1995. "The cash flow and informational effects of employee stock ownership plans," Journal of Financial Economics, Elsevier, vol. 38(2), pages 211-240, June.
- Franks, Julian & Mayer, Colin, 1998. "Bank control, takeovers and corporate governance in Germany," Journal of Banking & Finance, Elsevier, vol. 22(10-11), pages 1385-1403, October.
- Sangsoo Park & Moon H. Song, 1995. "Employee Stock Ownership Plans, Firm Performance, and Monitoring by Outside Blockholders," Financial Management, Financial Management Association, vol. 24(4), Winter.
- Rosett, Joshua G., 1990. "Do union wealth concessions explain takeover premiums? : The evidence on contract wages," Journal of Financial Economics, Elsevier, vol. 27(1), pages 263-282, September.
- Brian E. Becker, 1995. "Union rents as a source of takeover gains among target shareholders," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(1), pages 3-19, October.
- Chaplinsky, Susan & Niehaus, Greg, 1994. " The Role of ESOPs in Takeover Contests," Journal of Finance, American Finance Association, vol. 49(4), pages 1451-70, September.
- Gordon, Lilli A. & Pound, John, 1990. "ESOPs and corporate control," Journal of Financial Economics, Elsevier, vol. 27(2), pages 525-555, October.
- Garvey, Gerald T & Gaston, Noel, 1997. "A Theory of the Optimal Cost Barrier to Corporate Takeovers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 657-75, August.
- Alan J. Auerbach, 1988. "Corporate Takeovers: Causes and Consequences," NBER Books, National Bureau of Economic Research, Inc, number auer88-1, May.
- Mike Burkart & Denis Gromb & Fausto Panunzi, 1998. "Why Higher Takeover Premia Protect Minority Shareholders," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 172-204, February.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:3649. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.