Corporate Governance and Merger Activity in the U.S.: Making Sense of the 1980s and 1990s
Bengt R. Holmström
Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)
Steven N. Kaplan
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
MIT Dept. of Economics Working Paper No. 01-11
This paper describes and considers explanations for changes in corporate governance and merger activity in the United States since 1980. Corporate governance in the 1980s was dominated by intense merger activity distinguished by the prevalence of leveraged buyouts (LBOs) and hostility. After a brief decline in the early 1990s, substantial merger activity resumed in the second half of the decade, while LBOs and hostility did not. Instead, internal corporate governance mechanisms appear to have played a larger role in the 1990s. We conclude by considering whether these changes and the movement toward shareholder value are likely to be permanent.
Number of Pages in PDF File: 46
Keywords: Corporate Governance; Stock Options; Mergers and Acquisitions
JEL Classification: D2, G3, L2, L5working papers series
Date posted: February 21, 2001
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