The impact of investor protection law on global takeovers: LBO vs. non-LBO transactions

Xiaping Cao, Douglas Cumming, Jeremy Goh and Xiaoming Wang

Journal of International Financial Markets, Institutions and Money, 2019, vol. 59, issue C, 1-18

Abstract: This paper examines the impact of investor protection laws on value creation in LBOs versus non-LBO takeovers. We find that value creation measured by takeover premium is significantly higher in countries with better investor protection. The value effect of investor protection laws is more pronounced for LBOs than non-LBO takeover transactions. Among LBOs, investor protection’s value effect is lower for club deals than others. These results suggest that institutional context and legal environment determine the extent of value creation for takeovers around the world.

Keywords: Leveraged buyouts; Legal environment; Law; Premium; Shareholder rights; Club deals; Value effect; Investor protection (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:59:y:2019:i:c:p:1-18

DOI: 10.1016/j.intfin.2018.11.012

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