Working Paper Series, Department of Finance, Copenhagen Business School
No 2002-5:
Impact of Takeover Defenses on Managerial Incentives
Caspar Rose
Abstract: The article studies how takeover defenses influence
managerial
incentives with respect to long term investments, excess
liquidity and the amount of
debt relative to equity. The article
conducts a cross-sectional regression based on a
sample of Danish
listed firms, dealing explicitly with the problem of causation
between
the variables. Takeover defenses adopted by Danish firms mainly consist
of shares with dual class voting rights often in combination with
foundation
ownership. The article finds that protected firms have
significantly less debt to
equity. However, protected firms are not
significantly more oriented towards the
long-term and do not have
significantly more excess liquidity.
Keywords: Takeover Defenses; Company Law; Corporate Control; Corporate Governance; Simultaneous Equation Estimation; (follow links to similar papers)
JEL-Codes: C31; G32; G34; K22; (follow links to similar papers)
37 pages, July 1, 2002
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