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Journal article
Board classification and managerial entrenchment: Evidence from the market for corporate control
Journal of financial economics, v 87(3), pp 656-677
01 Mar 2008
Abstract
This paper considers the relation between board classification, takeover activity, and transaction outcomes for a panel of firms between 1990 and 2002. Target board classification does not change the likelihood that a firm, once targeted, is ultimately acquired. Moreover, shareholders of targets with a classified board realize bid returns that are equivalent to those of targets with a single class of directors, but receive a higher proportion of total bid surplus. Board classification does reduce the likelihood of receiving a takeover bid, however, the economic effect of bid deterrence on the value of the firm is quite small. Overall, the evidence is inconsistent with the conventional wisdom that board classification is an antitakeover device that facilitates managerial entrenchment. (C) 2007 Elsevier B.V. All rights reserved.
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Details
- Title
- Board classification and managerial entrenchment: Evidence from the market for corporate control
- Creators
- Thomas W. Bates - University of UtahDavid A. Becher - Drexel UniversityMichael L. Lemmon - University of Utah
- Publication Details
- Journal of financial economics, v 87(3), pp 656-677
- Publisher
- Elsevier
- Number of pages
- 22
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000255448200006
- Scopus ID
- 2-s2.0-40849094618
- Other Identifier
- 991019169104004721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics