32 Pages Posted: 5 Feb 2016
Date Written: February 1, 2016
Prior studies have documented that geographic distance renders remotely located firms more difficult to monitor. This paper asks whether remote firms self-discipline by removing anti-takeover provisions. We find that remote firms are more likely to leave anti-takeover provisions in place, which further enhances managerial entrenchment. Interestingly, this entrenchment does not lead to worse investment decisions by remote firms. In fact, we provide evidence that being out of sight could benefit firms by mitigating short-term pressure from Wall Street.
Keywords: location, managerial entrenchment, short-term pressure
Suggested Citation: Suggested Citation
Akyol, Ali C. and Wang, Renjie (Rex) and Verwijmeren, Patrick, Location, Managerial Entrenchment, and Short-Term Pressure (February 1, 2016). FIRN Research Paper No. 2727695. Available at SSRN: https://ssrn.com/abstract=2727695 or http://dx.doi.org/10.2139/ssrn.2727695