The effects of anti-takeover measures on Japanese corporations

Tsung-ming Yeh ()

Review of Quantitative Finance and Accounting, 2014, vol. 42, issue 4, 757-780

Abstract: This study examines 130 Japanese firms that announced and adopted pre-warning anti-takeover measures between 2005 and 2007. Consistent with the managerial entrenchment hypothesis, the announcement-associated abnormal returns are negative and statistically significant. An examination of the relationship between the abnormal returns and the firm’s ownership structure also supports the signaling hypothesis. The abnormal returns are positively related to the managerial shareholding variable as the managerial shareholding variable ranges from near-zero to an intermediate level; however, the relationship becomes negative as managerial shareholding increases past intermediate levels. Nevertheless, further examination of the post-adoption operating performance shows no significant trend towards deterioration as is predicted by the managerial entrenchment hypothesis. The results primarily support the signaling hypothesis: Japanese managers adopt anti-takeover measures mainly to deter hostile takeovers, and the anti-takeover measures, per se, do not fundamentally affect managerial behaviors. Copyright Springer Science+Business Media New York 2014

Keywords: Anti-takeover measures; Abnormal returns; Tobin’s q; Managerial entrenchment hypothesis; Shareholder interest hypothesis; Signaling hypothesis; G30; G34 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s11156-013-0361-0

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