Which Antitakeover Provisions Matter?

79 Pages Posted: 17 Mar 2018 Last revised: 4 May 2020

See all articles by Jonathan M. Karpoff

Jonathan M. Karpoff

University of Washington - Michael G. Foster School of Business; European Corporate Governance Institute (ECGI)

Robert J. Schonlau

Miami University - Farmer School of Business

Eric W. Wehrly

Western Washington University

Date Written: April 12, 2020

Abstract

Antitakeover provisions play a central role in corporate governance research. But there is little agreement over which, if any, provisions affect takeover likelihoods. As a result, researchers variously use the G-index, E-index, ad hoc indices, or selected individual provisions such as classified boards, to measure firms’ takeover defenses. In tests that account for the endogenous use of antitakeover provisions, we find that 11 of the 24 G-index provisions are robustly and negatively related to takeover likelihood. Various indices used in the literature to measure takeover defense relate to takeover likelihood to the extent they include this subset of provisions.

Keywords: Antitakeover provisions, takeover defenses, takeover likelihood, governance, acquisitions

JEL Classification: G34, K22, L14

Suggested Citation

Karpoff, Jonathan M. and Schonlau, Robert J. and Wehrly, Eric W., Which Antitakeover Provisions Matter? (April 12, 2020). Available at SSRN: https://ssrn.com/abstract=3142195 or http://dx.doi.org/10.2139/ssrn.3142195

Jonathan M. Karpoff (Contact Author)

University of Washington - Michael G. Foster School of Business ( email )

Box 353226
Seattle, WA 98195-3200
United States
206-685-4954 (Phone)
206-221-6856 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Robert J. Schonlau

Miami University - Farmer School of Business ( email )

Oxford, OH 45056
United States

Eric W. Wehrly

Western Washington University ( email )

516 High Street
Bellingham, WA 98225
United States
3606504820 (Phone)

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