Managerial Discretion and Takeover Performance

A Cosh, Paul Guest () and Alan Hughes

Working Papers from Centre for Business Research, University of Cambridge

Abstract: We investigate the relation between long run takeover performance and board share ownership in the acquiring company for a sample of 142 UK takeovers completed between 1985-95. We find evidence of a non-linear relationship both between board ownership and takeover profitability, and between board ownership and post-takeover share returns. We cast the analysis in a simultaneous equations framework using non- linear two-stage least squares, and find that our results are robust to this alternative specification. The results are therefore consistent with a managerial alignment / entrenchment trade-off.

Keywords: Corporate takeovers; board ownership; profitability; long run share returns (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2001-09
Note: PRO-1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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