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The Impact of Antitakeover Amendments on Corporate Financial Performance
Author(s) -
Johnson Mark S.,
Rao Ramesh P.
Publication year - 1997
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1997.tb00905.x
Subject(s) - shareholder , business , debt , overhead (engineering) , capital expenditure , event study , finance , value (mathematics) , enterprise value , capital (architecture) , accounting , monetary economics , financial system , economics , corporate governance , history , paleontology , context (archaeology) , archaeology , machine learning , computer science , biology , operating system
Previous event studies that examine the impact of antitakeover amendments on firm value provide mixed results. Some studies support the management entrenchment hypothesis, while others support the shareholder interest hypothesis. In this study, a longitudinal approach is used to examine the impact of antitakeover amendments on several financial attributes of the firm including: operating and net income to total assets, operating and overhead expenses to sales, research and development to total sales, capital expenditures to sales, and debt relative to total assets. It is concluded that antitakeover amendments are not deleterious in terms of their impact on various fundamental firm performance measures.