The effects of anti-takeover measures on Japanese corporations

The effects of anti-takeover measures on Japanese corporations This study examines 130 Japanese firms that announced and adopted pre-warning anti-takeover measures between 2005 and 2007. Consistent with the managerial entrenchment hypothesis, the announcement-associated abnormal returns are negative and statistically significant. An examination of the relationship between the abnormal returns and the firm’s ownership structure also supports the signaling hypothesis. The abnormal returns are positively related to the managerial shareholding variable as the managerial shareholding variable ranges from near-zero to an intermediate level; however, the relationship becomes negative as managerial shareholding increases past intermediate levels. Nevertheless, further examination of the post-adoption operating performance shows no significant trend towards deterioration as is predicted by the managerial entrenchment hypothesis. The results primarily support the signaling hypothesis: Japanese managers adopt anti-takeover measures mainly to deter hostile takeovers, and the anti-takeover measures, per se, do not fundamentally affect managerial behaviors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

The effects of anti-takeover measures on Japanese corporations

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Publisher
Springer US
Copyright
Copyright © 2013 by Springer Science+Business Media New York
Subject
Economics / Management Science; Finance/Investment/Banking; Accounting/Auditing; Econometrics; Operations Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-013-0361-0
Publisher site
See Article on Publisher Site

Abstract

This study examines 130 Japanese firms that announced and adopted pre-warning anti-takeover measures between 2005 and 2007. Consistent with the managerial entrenchment hypothesis, the announcement-associated abnormal returns are negative and statistically significant. An examination of the relationship between the abnormal returns and the firm’s ownership structure also supports the signaling hypothesis. The abnormal returns are positively related to the managerial shareholding variable as the managerial shareholding variable ranges from near-zero to an intermediate level; however, the relationship becomes negative as managerial shareholding increases past intermediate levels. Nevertheless, further examination of the post-adoption operating performance shows no significant trend towards deterioration as is predicted by the managerial entrenchment hypothesis. The results primarily support the signaling hypothesis: Japanese managers adopt anti-takeover measures mainly to deter hostile takeovers, and the anti-takeover measures, per se, do not fundamentally affect managerial behaviors.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Mar 22, 2013

References

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