The differential impact on stockholder wealth of various antitakeover provisions

James M. Mahoney, Chamu Sundaramurthy, Joseph T. Mahoney

Research output: Contribution to journalArticlepeer-review

Abstract

This paper examines the relationship between the passage of six types of corporate antitakeover provisions (supermajority, classified boards, fair-price, reduction in cumulative voting, anti-greenmail and poison pills) and stockholder wealth. Our event study from a sample of 381 firms that adopted 486 antitakeover provisions in the 1984 to 1988 period indicates a strongly negative effect on stockholder wealth, supporting the management entrenchment view of the antitakeover provisions. Moreover, the empirical results of this paper indicate that the market reacts equally negatively to both non-operating provisions that require stockholder approval and to operating provisions that do not require stockholder approval. However, separate analyses of the antitakeover provisions provide some support for the argument that stockholders discriminate between individual provisions.

Original languageEnglish (US)
Pages (from-to)531-549
Number of pages19
JournalManagerial and Decision Economics
Volume17
Issue number6
DOIs
StatePublished - Nov 1996

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

Fingerprint Dive into the research topics of 'The differential impact on stockholder wealth of various antitakeover provisions'. Together they form a unique fingerprint.

Cite this