Takeover Threats and Managerial Myopia
Jeremy C Stein
Journal of Political Economy, 1988, vol. 96, issue 1, 61-80
Abstract:
This paper examines the familiar argument that takeover pressure can be damaging because i t leads managers to sacrifice long-term interests in order to boost c urrent profits. If stockholders are imperfectly informed, temporarily low earnings may cause the stock to become undervalued, increasing t he likelihood of a takeover at an unfavorable price; hence the manage rial concern with current bottom line. The magnitude of the problem d epends on a variety of factors, including the attitudes and beliefs o f shareholders, the extent to which corporate raiders have inside inf ormation, and the degree to which managers are concerned with retaini ng control of their firms. Copyright 1988 by University of Chicago Press.
Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (540)
Downloads: (external link)
http://dx.doi.org/10.1086/261524 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JPE for details.
Related works:
Working Paper: Takeover Threats and Managerial Myopia (1988) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:v:96:y:1988:i:1:p:61-80
Access Statistics for this article
More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().