Firm size and the effectiveness of the market for corporate control

Offenberg, David

doi:10.1016/j.jcorpfin.2008.09.006

Cited by 54 publications

(37 citation statements)

References 39 publications

(42 reference statements)

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“…The risk of being fired after bad acquisitions has been documented in the academic literature (see, e.g., Mitchell and Lehn, 1990;Lehn and Zhao, 2006;Mobbs, 2008;Offenberg, 2009), and recent notorious CEO dismissal cases remind us that this is not only an academic argument (Carla Fiorina after the Compaq acquisition by HP, Jean-Marie Messier after the Vivendi-Universal merger, Maurice Lippens after the ABN Amro acquisition by Fortis, just to mention a few examples). We model the CEO's decision problem under certain assumptions.…”

Section: Assumptionsmentioning

confidence: 98%

Learning, hubris and corporate serial acquisitions

Aktas

Bodt

Roll

2009

Journal of Corporate Finance

135

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Recent empirical research has shown that, from deal to deal, serial acquirers' cumulative abnormal returns (CAR) are declining. This has been most often attributed to CEOs hubris. We question this interpretation. Our theoretical analysis shows that (i) a declining CAR from deal to deal is not sufficient to reveal the presence of hubris, (ii) if CEOs are learning, economically motivated and rational, a declining CAR from deal to deal should be observed, (iii) predictions can be derived about the impact of learning and hubris on the time between successive deals and, finally, (iv) predictions about the CAR and about the time between successive deal trends lead to testable empirical hypotheses.

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Section: Assumptionsmentioning

confidence: 98%

Learning, hubris and corporate serial acquisitions

Aktas

Bodt

Roll

2009

Journal of Corporate Finance

135

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“…The size of firm has been scrutinized in finance studies such as in the models of asset pricing (Fama and French 1993), the decisions of financing or capital structure (Berger and Udell 1995), the decisions of merger and acquisition (Moeller et al 2004;Offenberg 2009), and the effectiveness of the board of directors (Setia-Atmaja 2008). In other words, the size of firms have important role in many aspects of finance studies.…”

Section: Firm Size Effectmentioning

confidence: 99%

Female Directors and Firm Performance: Evidence from UK Listed Firms

Pasaribu

2017

GADJAH MADA INT. J. BUS.

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Abstract:The impact of female directors on firm performance has lacked consistency in the previously conducted empirical studies, which may be due to the endogeneity problem, or certain characteristics (i.e. governance, industry, competition). This study examines the relationship between female directors and firm performance by addressing those problems. This study analyses all non-financial UK listed firms during the period 2004-2012 and employs several econometric models. The regression results indicate that there is little evidence that female directors have a positive and strong relationship with firm performance. But, further analysis reports that the UK's small listed firms experience a positive significant effect, because small firms do not suffer from the problem of over-monitoring and they have more flexibility in composing their boards of directors.

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“…This is important because disciplinary takeovers are a key mechanism to remove managers who make value-destroying investments (Scharfstein, 1988;Mitchell and Lehn, 1990;Kini, Kracaw, and Mian, 2004;Offenberg, 2009). To assess this, the dependent variable is 'Acquired', an indicator that equals one if the firm is taken over within 4 years of the initial acquisition (following Of- …”

Section: Proof 2 the Proof Is In The Appendixmentioning

confidence: 99%

“…However, there are two key changes. First, following Offenberg (2009), the models include the Herfindahl-Hishman Index ('HHI') of the initial-bidder's industry since a high HHI indicates a crowded industry, which might reduce the probability of receiving a takeover-bid (Powell, 1997;Brar, Giamouridis, and Liodakis, 2009). The results are robust to the use of the cross-derivative-method proposed in Ai and Norton (2003), which corrects coefficient-estimates and standard errors of interaction terms Norton, Wang, and Ai (2004); Ai and Norton (2003);Brambor, Roberts Clark, and Golder (2006); Powers (2005) 18 The results are unchanged in models that replace HHI with a dummy that equals 1 if the number of firms in the industry is in the top 25% of all industries.…”

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confidence: 99%

Anti-Takeover Provisions as a Source of Innovation and Value Creation

Humphery‐Jenner

2011

SSRN Journal

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Anti-takeover Provisions as a Source of Innovation and Value CreationHumphery, M.L. General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.-Users may download and print one copy of any publication from the public portal for the purpose of private study or research -You may not further distribute the material or use it for any profit-making activity or commercial gain -You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immediately and investigate your claim. AbstractManagers are risk averse. Excessive risk-aversion can destroy shareholder wealth. A key source of risk is the threat of an opportunistic takeover designed to take advantage of depressed market prices. This is especially the case in innovative or hard-to-value ('HtV') companies whose price may be depressed due to valuation difficulties rather than managerial under-performance. For these HtV firms, the threat of an opportunistic takeover can destroy value by inducing agency conflicts of managerial risk aversion. managers and regulators argue that ATPs can ameliorate this problem. This article presents a theoretical model and empirical results that show that for HtV firms, ATPs encourage managers to make value-creating takeovers and increase innovation and do not induce agency conflicts of managerial entrenchment. This implies that for innovative or hard-to-value firms, ATPs can ameliorate managerial risk aversion and encourage value-creation.

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Firm size and the effectiveness of the market for corporate control

Cited by 54 publications

References 39 publications

Learning, hubris and corporate serial acquisitions

Learning, hubris and corporate serial acquisitions

Female Directors and Firm Performance: Evidence from UK Listed Firms

Anti-Takeover Provisions as a Source of Innovation and Value Creation

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