Location, Managerial Entrenchment, and Short-Term Pressure

32 Pages Posted: 5 Feb 2016

See all articles by Ali C. Akyol

Ali C. Akyol

University of Ottawa

Rex Wang Renjie

Vrije Universiteit Amsterdam

Patrick Verwijmeren

Erasmus University Rotterdam (EUR)

Date Written: February 1, 2016

Abstract

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

Akyol, Ali C. and Wang, Renjie 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

Ali C. Akyol

University of Ottawa ( email )

55 Laurier Ave E
Ottawa, Ontario K1N 6N5
Canada

HOME PAGE: http://www.aliakyol.com

Renjie Wang (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Patrick Verwijmeren

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

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