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State Intervention in the Market for Corporate Control: The Case of Pennsylvania Senate Bill 1310
Journal article   Peer reviewed

State Intervention in the Market for Corporate Control: The Case of Pennsylvania Senate Bill 1310

Samuel Szewczyk and George Tsetsekos
Journal of financial economics, v 31(1)
01 Feb 1992
DOI: https://doi.org/10.1016/0304-405X(92)90009-M

Abstract

Asset Pricing, Trading Volume, Bond Interest Rates (G12) Corporate Control Corporate Finance and Governance: Government Policy and Regulation (G38) Firm Mergers, Acquisitions, Restructuring, Voting, Proxy Contests, Corporate Governance (G34) Northern America Shareholder Shares U.S
This study investigates the impact of Pennsylvania Senate Bill 1310 on the share prices of Pennsylvania corporations. Considered the most severe of the second-generation antitakeover laws, the statute limits the ability of shareholders to challenge management through the proxy process and eliminates the traditional fiduciary obligation of directors to promote shareholders' interests. The authors find that PA SB1310 significantly decreased share values and estimate the loss to shareholders of Pennsylvania firms at $4 billion. However, firms with antitakeover charter amendments already in place were less affected and firms that exempted themselves from PA SB1310 recovered a portion of shareholders' wealth.

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47 citations in Web of Science
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Web of Science research areas
Business, Finance
Economics
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