{"title":"Are Antitakeover Amendments Good for Shareholders? Evidence from the Adoption of Antitakeover Provisions in the Post-SOX Era","authors":"Erin E. Smith","doi":"10.1142/s2010139219500149","DOIUrl":null,"url":null,"abstract":"By combining a regression discontinuity (RD) design with a novel instrumental variable, I estimate the value of antitakeover provisions (ATPs) adopted between 2006 and 2010. In contrast to evidence from earlier periods, I estimate that, during this recent period, ATP adoption increased shareholder value by approximately 3%. An important challenge to estimating the value of ATPs is that standard RD estimates can be biased if interested parties manipulate vote outcomes. To address this, I exploit exogenous variation in the likelihood of passage that results from “over-votes”, the extra illegitimate votes arising from securities lending practices. Because ATP passage requires affirmative votes from a majority of outstanding shares, rather than of shares voted, over-votes increase the likelihood of passage.","PeriodicalId":45339,"journal":{"name":"Quarterly Journal of Finance","volume":null,"pages":null},"PeriodicalIF":0.9000,"publicationDate":"2019-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Quarterly Journal of Finance","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1142/s2010139219500149","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 2
Abstract
By combining a regression discontinuity (RD) design with a novel instrumental variable, I estimate the value of antitakeover provisions (ATPs) adopted between 2006 and 2010. In contrast to evidence from earlier periods, I estimate that, during this recent period, ATP adoption increased shareholder value by approximately 3%. An important challenge to estimating the value of ATPs is that standard RD estimates can be biased if interested parties manipulate vote outcomes. To address this, I exploit exogenous variation in the likelihood of passage that results from “over-votes”, the extra illegitimate votes arising from securities lending practices. Because ATP passage requires affirmative votes from a majority of outstanding shares, rather than of shares voted, over-votes increase the likelihood of passage.
期刊介绍:
The Quarterly Journal of Finance publishes high-quality papers in all areas of finance, including corporate finance, asset pricing, financial econometrics, international finance, macro-finance, behavioral finance, banking and financial intermediation, capital markets, risk management and insurance, derivatives, quantitative finance, corporate governance and compensation, investments and entrepreneurial finance.