Having more potential raiders weakens the takeover threat

Linda Toolsema-Veldman*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)


It is generally assumed that a well-developed market for corporate control results in a takeover threat that disciplines management. We study the effects of a larger market for corporate control and show that an increase in the number of potential raiders of a firm may decrease the probability of a takeover. In turn, the weakened takeover threat results in weaker managerial incentives. In equilibrium, this implies lower managerial effort and therefore a lower ex ante value of the firm. (c) 2006 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)670-685
Number of pages16
JournalJournal of Economic Behavior & Organization
Issue number4
Publication statusPublished - Apr-2007


  • takeover threat
  • corporate control
  • managerial incentives
  • competition
  • FIRM

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