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- Title
Are Antitakeover Amendments Good for Shareholders? Evidence from the Adoption of Antitakeover Provisions in the Post-SOX Era.
- Authors
Smith, Erin E.
- Abstract
By combining a regression discontinuity (RD) design with a novel instrumental variable, I estimate the value of antitakeover provisions (ATPs) adopted between 2006 and 2010. In contrast to evidence from earlier periods, I estimate that, during this recent period, ATP adoption increased shareholder value by approximately 3%. An important challenge to estimating the value of ATPs is that standard RD estimates can be biased if interested parties manipulate vote outcomes. To address this, I exploit exogenous variation in the likelihood of passage that results from "over-votes", the extra illegitimate votes arising from securities lending practices. Because ATP passage requires affirmative votes from a majority of outstanding shares, rather than of shares voted, over-votes increase the likelihood of passage.
- Subjects
ANTITAKEOVER strategies; STOCKHOLDERS; REGRESSION discontinuity design; CORPORATE governance; VOTING
- Publication
Quarterly Journal of Finance, 2019, Vol 9, Issue 4, pN.PAG
- ISSN
2010-1392
- Publication type
Article
- DOI
10.1142/S2010139219500149