Having more potential raiders weakens the takeover threat

Linda Toolsema-Veldman*

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

1 Citaat (Scopus)

Samenvatting

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.

Originele taal-2English
Pagina's (van-tot)670-685
Aantal pagina's16
TijdschriftJournal of Economic Behavior & Organization
Volume62
Nummer van het tijdschrift4
DOI's
StatusPublished - apr-2007

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