 Antitakeover provisions and investment in mergers and acquisitions: A causal reevaluationNicholas F. Carline and Sridhar Gogineni Journal of Corporate Finance, 2021, vol. 69, issue C Abstract: In this study, we are the first to reevaluate causally the effects of antitakeover provisions (ATPs) on the likelihood and quality of investment in mergers and acquisitions (M&A). We do so by exploiting instrumental variables to circumvent evidential endogeneity in ATPs. Our causal analysis is new to reveal that higher levels of ATPs are associated with lower propensity for investment in M&A and, after accounting for unobservable factors that affected the decision to invest in M&A, with investment that is more likely to be both value enhancing to shareholders and personally riskier to managers. Our findings support theory and evidence in other corporate contexts that gives weight to the possibility that ATPs curb risk related agency conflict. Our collective findings of a (positive) surprise also provide substantiation for known information about ATPs having value relevance for market perception of the quality of investment in M&A. Keywords: Antitakeover provisions; Mergers and acquisitions; Risk related agency conflict; Causality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:69:y:2021:i:c:s0929119921000833 DOI: 10.1016/j.jcorpfin.2021.101962 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.