Which Antitakeover Provisions Matter?
78 Pages Posted: 17 Mar 2018 Last revised: 20 Apr 2019
Date Written: April 18, 2019
There is scant empirical evidence and widespread disagreement over which, if any, antitakeover provisions affect firms’ 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 only to the extent they include this subset of provisions.
Keywords: Antitakeover Provisions, Governance Provisions, Takeover Defenses, G-Index, E-Index, Acquisitions
JEL Classification: G34, K22, L14
Suggested Citation: Suggested Citation