Managerial Entrenchment and Antitakeover Provisions in Japan

Seoul Journal of Economics, Vol. 24, No. 3, pp. 287-331, 2011

46 Pages Posted: 6 Sep 2011

See all articles by Kaoru Hosono

Kaoru Hosono

Gakushuin University - Economics

Miho Takizawa

Toyo University

Kotaro Tsuru

Research Institute of Economy, Trade and Industry (RIETI)

Date Written: August 30, 2011

Abstract

We analyze the characteristics of the firms that introduce anti-takeover provisions using a Japanese firm-level dataset. We find that the likelihood of the adoption of antitakeover provisions is correlated positively with firm age and the proportion of cross-shareholding and negatively with the share of managerial ownership. The adoption of antitakeover measures is suggested to be motivated by self-protection on the part of managers and is influenced by the conflicts of interest between managers and shareholders. We also find that the operating performance or the stock market valuation does not affect the likelihood of the adoption of antitakeover provisions.

Keywords: antitakeover provisions, entrenchment, Japan

JEL Classification: G34

Suggested Citation

Hosono, Kaoru and Takizawa, Miho and Tsuru, Kotaro, Managerial Entrenchment and Antitakeover Provisions in Japan (August 30, 2011). Seoul Journal of Economics, Vol. 24, No. 3, pp. 287-331, 2011, Available at SSRN: https://ssrn.com/abstract=1922411

Kaoru Hosono (Contact Author)

Gakushuin University - Economics ( email )

1-5-1 Mejiro, Toshima-ku
Tokyo 171-8588
Japan

Miho Takizawa

Toyo University ( email )

5-28-20 Hakusan
Bunkyo-ku
Tokyo 112-8606, Tokyo 1128606
Japan

Kotaro Tsuru

Research Institute of Economy, Trade and Industry (RIETI) ( email )

1-3-1 Kasumigaseki
Chiyoda-ku
Tokyo 100-8901
Japan

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