Abstract

http://ssrn.com/abstract=2141410
 
 

Citations (2)



 


 



How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment


Alma Cohen


Tel Aviv University - Eitan Berglas School of Economics; Harvard Law School; National Bureau of Economic Research (NBER)

Charles C. Y. Wang


Harvard Business School

July 3, 2013

Journal of Financial Economics (JFE), Forthcoming
Harvard Business School Accounting & Management Unit Working Paper No. 13-068

Abstract:     
The well-established negative correlation between staggered boards (SBs) and firm value could be due to SBs leading to lower value or a reflection of low-value firms' greater propensity to maintain SBs. We analyze the causal question using a natural experiment involving two Delaware court rulings ― separated by several weeks and going in opposite directions ― that affected the antitakeover force of SBs. We contribute to the long-standing debate on staggered boards by presenting empirical evidence consistent with the market viewing SBs as leading to lower firm value for the affected firms.

Number of Pages in PDF File: 45

Keywords: Corporate governance, Staggered board, Takeover defense, Antitakeover provision, Proxy fight, Tobin's, Firm value, Agency cost, Delaware, Chancery court, Airgas

JEL Classification: G30, G34, K22

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Date posted: September 4, 2012 ; Last revised: July 4, 2013

Suggested Citation

Cohen, Alma and Wang, Charles C. Y., How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment (July 3, 2013). Journal of Financial Economics (JFE), Forthcoming; Harvard Business School Accounting & Management Unit Working Paper No. 13-068. Available at SSRN: http://ssrn.com/abstract=2141410 or http://dx.doi.org/10.2139/ssrn.2141410

Contact Information

Alma Cohen
Tel Aviv University - Eitan Berglas School of Economics ( email )
Ramat Aviv, Tel Aviv, 69978
Israel
Harvard Law School ( email )
Cambridge, MA 02138
United States
(617) 496-4099 (Phone)
(617) 812-0554 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Charles C. Y. Wang (Contact Author)
Harvard Business School ( email )
Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
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