Having more potential raiders weakens the takeover threat

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We argue in this paper that a more active market for corporate control may weaken the takeover threat. We show that an increase in the number of potential raiders tends to decrease the probability of a takeover. This in turn weakens managerial incentives. The lower managerial effort level that results in equilibrium negatively affects the ex ante value of the firm.
Original languageEnglish
Place of PublicationGroningen
PublisherUniversity of Groningen
Number of pages26
Publication statusPublished - 2003

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