Author
Şahin, Cansu İskenderoğlu
Publication Date
2021-10
Publication Place
-
Elsevier
Subject
Internal capital markets, Antitakeover laws, Corporate investment, Allocation of resources, Agency problems
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
0929-1199
Record ID
6b2ae313-b24d-4911-be71-cfcdaadf8139
Library Location
International Finance
Date
2021-10
Sample Text
I use the staggered adoption of state-level antitakeover laws to provide causal evidence that managerial agency problems reduce the allocative efficiency of conglomerate firms. I find that increases in control slack following the passage of antitakeover laws reduces q-sensitivity of investment by 64%. The adverse impact of the laws appears mostly at conglomerate firms that benefited from disciplinary takeover threats prior to the passage of the laws, lacked alternative sources of pressure on management, or had the structural makings to fuel wasteful influence activities and power struggles among managers. These findings suggest that takeover threats impact the efficiency of resource allocation.
DOI
10.1016/j.jcorpfin.2021.102061
Cilt
70
