Despite the prevalent use of anti-takeover provisions (ATPs) based indices as measures of corporate governance quality, the role of ATPs (efficiency vs. entrenchment hypotheses), and their relationship to firm performance are not fully understood. Corporate spin-offs offer a unique opportunity to disentangle entrenchment motives from efficiency motives behind the adoption of ATPs. This setting also provides relatively clean inferences on the relation between ATPs and firm performance. This paper studies the design of ATPs in spun-off firms relative to their parents, the determinants of ATPs, and their relationship to subsequent firm performance. We show that spun-off firms typically are endowed with a higher number of ATPs than their parents, and the additional provisions are mostly delay provisions. Our results on the determinants of ATPs suggest they are more likely to be motivated by efficiency than by entrenchment. Further, in sharp contrast to the negative relationship between ATP indices and equity returns as documented in Gompers, Ishii and Metricks (2003) and Bebchuk, Cohen, Ferrell (2004), we find a strong positive relationship between ATP indexes and subsequent stock returns for our sample spun-off firms.
| Identifer | oai:union.ndltd.org:LSU/oai:etd.lsu.edu:etd-12212015-122506 |
| Date | 14 January 2016 |
| Creators | Du, Wei |
| Contributors | Sanger, Gary C., He, Shan, Pace, R. Kelley, Newman, Robert J., McGuire, Jean B. |
| Publisher | LSU |
| Source Sets | Louisiana State University |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lsu.edu/docs/available/etd-12212015-122506/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached herein a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to LSU or its agents the non-exclusive license to archive and make accessible, under the conditions specified below and in appropriate University policies, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
Page generated in 0.0484 seconds