We examine the extent to which shareholders allow a weak governance structure in response to increasing competition pressures in the product market. We treat acquisitions by firm rivals as exogenous threats in a competitive product market. We find that firms adopt greater entrenchment provisions when there are greater competition threats. Moreover, firms with high institutional ownership and board independence are particularly aggressive, which is consistent with our presumption that aggressive behavior represents a strategic decision by shareholders. Finally, we find beneficial effects in the adoption of entrenchment provisions on firm value only when competition pressures increase at the same time.
Keywords : Corporate Governance; Product Market Competition; Takeover.
JEL Classification: G34; L11
학회소식
[2015년 제 4차] Does Product Market Competition Affect Corporate Go
작성자 : 관리자
조회수 : 725
게시일 :
2016-01-08
