Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Finance

No 2001-4: Corporate Financial Performance and the Use of Takeover Defenses

Caspar Rose
Additional contact information
Caspar Rose: Department of Finance, Copenhagen Business School, Postal: Department of Finance, Copenhagen Business School, Solbjerg Plads 3, A5, DK-2000 Frederiksberg, Denmark

Abstract: This paper tests the hypothesis that the threat of a contested takeover improves corporate performance. This is done by a cross-sectional analysis of listed Danish firms with and without effective takeover defenses. Takeover defenses adopted by Danish firms mainly consist of dual class voting rights often in combination with foundation ownership. Using simultaneous equation estimation to deal with the problem of causation, the results show that unprotected firms do not outperform protected firms. This suggests that management in unprotected firms are disciplined by other corporate governance mechanisms than the market for corporate control, including the legal protection of shareholders.

Keywords: Takeovers; Company law; Corporate Control; Corporate Governance; Simultaneous equation estimation.

JEL-codes: C31; G32; G34; K22

40 pages, April 30, 2001

Full text files

7169  

Download statistics

Questions (including download problems) about the papers in this series should be directed to Lars Nondal ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:31:06.