In particular, Mahoney and Mahoney (1993) studied provisions adopted between 1974-1988 and found that negative stockholder reaction to antitakeover
provisions increased over time.
Gompers, Ishii, and Metrick, 2003; Bebchuk and Cohen, 2005; Core, Guay, and Rusticus, 2006; Bebchuk, Cohen, and Ferrell, 2009; Wang and Xie, 2009), we use four indices of antitakeover
provisions to proxy for the quality of corporate governance.
Defenses, and the Perils of Federal Intervention,
139) Incorporation information is thus relevant to capture the differences between states' antitakeover
(or pro-takeover) stances and, more generally, the extent to which a state legislation can be considered as more managerial-friendly or shareholder-friendly.
They find that acquirers with more antitakeover
provisions experience significantly lower announcement-period abnormal stock returns.
Thus, the evidence documented by Hotchkiss (1995) could be related with the early time horizon, especially considering the higher antitakeover
leverage of firms in the 1980s.
predominantly on three kinds of antitakeover
627 (2013) (analyzing share price reactions to two important Delaware court decisions affecting the stringency of antitakeover
Typically, critics of short-termism support stronger antitakeover
protections in order to encourage longterm corporate investment.
Hence, they reveal that the adoption of antitakeover
amendments exacerbates agency problems by restricting shareholder rights and increasing managerial entrenchment.
An example of a specific business association rule would be an antitakeover
As a result of the removal of antitakeover
provisions, acquisitions and capital expenditures fall and firm valuation increases in the long-run.