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Impact of Takeover Defenses on Managerial Incentives

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  • Rose, Caspar

    (Department of Finance, Copenhagen Business School)

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.

Suggested Citation

  • Rose, Caspar, 2002. "Impact of Takeover Defenses on Managerial Incentives," Working Papers 2002-5, Copenhagen Business School, Department of Finance.
    • Handle: RePEc:hhs:cbsfin:2002_005
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    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/7172
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    References listed on IDEAS

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    8. Neumann, Robert & Voetmann, Torben, 1999. "Does Ownership Matter? Evidence from Changes in Institutional and Strategic Investors' Equity Holdings," Working Papers 1999-9, Copenhagen Business School, Department of Finance.
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    Cited by:

    1. Caspar Rose & Carsten Mejer, 2003. "The Danish Corporate Governance System: from stakeholder orientation towards shareholder value," Corporate Governance: An International Review, Wiley Blackwell, vol. 11(4), pages 335-344, October.

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    More about this item

    Keywords

    Takeover Defenses; Company Law; Corporate Control; Corporate Governance; Simultaneous Equation Estimation;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • 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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