If the private benefits of control are high and management owns a small equity stake, managers and workers are natural allies. There are two forces at play. First, managers effectively transform employees into a quot;poison pillquot; by signing generous long-term labor contracts and thereby reducing the firm's attractiveness to a raider. Second, employees act as quot;white squiresquot; for the incumbent managers, lobbying against hostile takeovers to protect the high wages enjoyed under incumbent management. Our model is consistent with available empirical findings, and yields new predictions as well
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Details
Title
Managers, Workers, and Corporate Control
Creators
Paolo F Volpin - Drexel University
Publication Details
SSRN Electronic Journal
Publisher
SSRN
Resource Type
Preprint
Language
German
Academic Unit
Finance
Other Identifier
991021862396104721
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