TY - UNPB
T1 - The effects of takeover threats of shareholders and firm value
AU - Haan, Marco
AU - Riyanto, Yohanes
N1 - Relation: http://www.rug.nl/
date_submitted:2002
Rights: Rijksuniversiteit Groningen
PY - 1999
Y1 - 1999
N2 - We study the role of takeover threats as a corporate control mechanism using Aghion and Tirole's (1997) model of formal and real authority. Shareholders do not monitor the manager's actions, since ownership is widely dispersed. A corporate raider may monitor, and steps in if a profit opportunity exists. In our model, a takeover threat decreases the manager's effort and does not benefit shareholders. The effect of a takeover threat on the expected value of the firm is ambiguous. It is in the interest of the corporate raider if severance payments the manager receives upon being fired are high. Shareholders, however, prefer them to be low.
AB - We study the role of takeover threats as a corporate control mechanism using Aghion and Tirole's (1997) model of formal and real authority. Shareholders do not monitor the manager's actions, since ownership is widely dispersed. A corporate raider may monitor, and steps in if a profit opportunity exists. In our model, a takeover threat decreases the manager's effort and does not benefit shareholders. The effect of a takeover threat on the expected value of the firm is ambiguous. It is in the interest of the corporate raider if severance payments the manager receives upon being fired are high. Shareholders, however, prefer them to be low.
KW - 85.10 strategisch beleid (bedrijfskunde)
KW - Bedrijfsovernames, Aandelen, Taxatie
M3 - Working paper
BT - The effects of takeover threats of shareholders and firm value
PB - s.n.
ER -