This study investigates the impact on financial performances of preventive takeover defences in S&P500 firms from 2017 to 2021. This study aims to study takeover defences impact on non- market performance indicators. Previous research is not extensive, and it provides contradic-tory evidence focusing more on market-related measures. Four shark repellents’ impact on ROE, ROA, CAPEX and EBIT were studied. Panel data pooled OLS models results highlight that take-over defences impact is heterogeneous. Firstly, there is a negative correlation between takeover defences and profitability indicators, supporting the managerial entrenchment hypothesis. In particular, few defences directly cause a reduction in ROE. Other negative relations damage shareholders. Secondly, directors’ removal limitations are positively correlated with long-term investments: in line with the shareholders’ interest hypothesis. Finally, the combination of different takeover defences has a moderating effect on the initial impact. This study contributes to the debate on the harmfulness of takeover defences and provides insights to firms and regulators on the best defence to adopt.

The impact of preventive takeover defences on corporate financial performance: evidence from the US

Gigante, Gimede;
2023

Abstract

This study investigates the impact on financial performances of preventive takeover defences in S&P500 firms from 2017 to 2021. This study aims to study takeover defences impact on non- market performance indicators. Previous research is not extensive, and it provides contradic-tory evidence focusing more on market-related measures. Four shark repellents’ impact on ROE, ROA, CAPEX and EBIT were studied. Panel data pooled OLS models results highlight that take-over defences impact is heterogeneous. Firstly, there is a negative correlation between takeover defences and profitability indicators, supporting the managerial entrenchment hypothesis. In particular, few defences directly cause a reduction in ROE. Other negative relations damage shareholders. Secondly, directors’ removal limitations are positively correlated with long-term investments: in line with the shareholders’ interest hypothesis. Finally, the combination of different takeover defences has a moderating effect on the initial impact. This study contributes to the debate on the harmfulness of takeover defences and provides insights to firms and regulators on the best defence to adopt.
2023
2023
Gigante, Gimede; Angioni, Ottavio
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4056497
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