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The effects of takeover laws on corporate financing policies: global evidence

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  • Kim, Jaehyeon
  • Koo, Kang Mo

Abstract

Using a cutting-edge estimation method to address heterogenous treatment effects arising from differential treatment timing, we examine the effect of international takeover laws on corporate financing. We find that firms reduce their equity financing in response to takeover laws. Further analyses indicate that takeover laws’ negative effect on equity financing is more pronounced for firms with higher financial constraints and for firms in countries with strong investor protections.

Suggested Citation

  • Kim, Jaehyeon & Koo, Kang Mo, 2024. "The effects of takeover laws on corporate financing policies: global evidence," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324011802
    DOI: 10.1016/j.frl.2024.106151
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    More about this item

    Keywords

    International takeover laws; Equity financing; Debt financing; Investor protections;
    All these keywords.

    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
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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