I review recent takeover research which advances our understanding of ?who buys who? in the drive for productive efficiency.
This research provides detailed information on text-based definitions of product market links between bidders and targets, the role of the supply chain and industrial networks in driving takeovers, target plant efficiency, and pre- and post-takeover investment in product innovation. Moreover, recent evidence adds to our understanding of ?how firms are sold? (transaction efficiency). Almost half of takeovers involving public targets are initiated by the seller and not by the buyer. Targets are strongly averse to bidder toeholds, and the merger negotiation process strongly protects proprietary
information. Takeover premiums leave traces of rational bidding strategies, including
bid preemption and winner?s curse avoidance. Recent tests employing exogenous
instrumentation of bidder valuations reject that bidder shares are systematically overpriced in all-stock bids, and suggest that bidder synergy gains are much larger than previously thought.
A 1970 New York Times essay on corporate social responsibility by Milton Friedman is often said to have launched a shareholder-focused reorientation of managerial priorities in America’s public companies. The essay correspondingly is a primary...Read more
Institutional shareholder stewardship codes (‘stewardship codes’) exist in many jurisdictions. They reflect the growing importance of institutional shareholders in capital markets, and a belief that increased engagement by institutional...Read more
This paper examines the effect of disclosure regulation on the takeover market. We study the implementation of a recent European regulation that imposes tighter disclosure requirements regarding the financial and ownership information on public...Read more
A popular research design identifies the effects of corporate governance by (changes in) state laws, clustering standard errors by state of incorporation. Using Monte-Carlo simulations, this paper shows that conventional statistical tests based...Read more