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Articles 1 - 8 of 8
Full-Text Articles in Finance and Financial Management
Governance And Corporate Control: Compliments Or Substitutes, Atreya Chakraborty
Governance And Corporate Control: Compliments Or Substitutes, Atreya Chakraborty
Atreya Chakraborty
In this paper we test for the motives for adopting golden parachutes and Anti Takeover Amendments (ATAs). Firms that exhibited financial characteristics that were associated with a greater probability of hostile raids were also more likely to adopt golden parachutes or ATAs. We also find evidence to support the hypothesis that the adoption of golden parachutes and poison pills may in fact be complement each other.
Takeover Defenses, Golden Parachutes, And Bargaining Over Stochastic Synergy Gains: A Note On Optimal Contracting, Atreya Chakraborty
Takeover Defenses, Golden Parachutes, And Bargaining Over Stochastic Synergy Gains: A Note On Optimal Contracting, Atreya Chakraborty
Atreya Chakraborty
We incorporate managerial risk aversion and stochasticity of takeover synergy gains into Harris’ (Harris, E.G. 1990. Antitakeover measures, golden parachutes, and target firm shareholder welfare. Rand Journal of Economics 21, no. 4 : 614–25.) bargaining model for the coexistence of antitakeover defenses and golden parachutes in corporate charters.We show that: (i) it is not always optimal that the target-firm shareholders adopt antitakeover defenses, (ii) the size of the golden parachute is proportional to the riskiness of the synergistic gains, and (iii) the target-firm shareholders are unequivocally better-off with golden parachutes than takeover-contingent stock options.
Risk Sharing And The Market For Corporate Control: A Case For Golden Parachutes, Atreya Chakraborty
Risk Sharing And The Market For Corporate Control: A Case For Golden Parachutes, Atreya Chakraborty
Atreya Chakraborty
The predictability of security returns has received considerable attention in the literature, and yet the predictability of bond returns beyond the US markets has remained far less explored. Here we plan to remedy the shortcoming, and in that effort we analyse the ability of several predetermined information variables in predicting bond returns in the European market. We test if variables, commonly used for that matter in the context of other markets (such as inverse relative wealth, term spread, real bond yield and a January dummy) are also useful predictors of European bond returns. Due to some particularities of the sample …
Waves And Persistence In Merger And Acquisition Activity, Atreya Chakraborty
Waves And Persistence In Merger And Acquisition Activity, Atreya Chakraborty
Atreya Chakraborty
Markov regime-switching and sine-wave models have been used to capture the apparent wave-like behavior in aggregate U.S. merger and acquisition (M and A) activity. In this paper we offer an alternative characterization of the dynamic structure in M and A activity as a strongly dependent or long-memory process.
Takeover Defenses And Dilution: A Welfare Analysis, Atreya Chakraborty
Takeover Defenses And Dilution: A Welfare Analysis, Atreya Chakraborty
Atreya Chakraborty
Existing theory suggests that, in an unregulated market for corporate control, the level of takeovers is suboptimal because shareholders do not receive the full benefit from them. However, existing theory neglects that the threat of takeover may divert managerial effort from productive to defensive activities. This paper shows that, when this is considered, takeovers may, in fact, be excessive.
Poison Pills, Optimal Contracting, And The Market For Corporate Control: Evidence From Fortune 500 Firms, Atreya Chakraborty
Poison Pills, Optimal Contracting, And The Market For Corporate Control: Evidence From Fortune 500 Firms, Atreya Chakraborty
Atreya Chakraborty
The rationale for issuing poison pill securities remains unclear, despite the findings of a large body of prior research that these defenses adversely affect shareholder wealth. This paper investigates the hypothesis that the adoption of such defenses may reflect shareholders’ desire to contract efficiently with their managers in an environment characterized by hostile takeovers and uncertainty about the managers’ true performance. Unlike previous research, we focus on financial characteristics of firms as they relate to the motives for adopting such defenses. Our empirical research does not support the optimal contacting hypothesis. We interpret our results as supportive of the managerial …
Agency Costs, Charter Amendments And The Market For Corporate Control, Atreya Chakraborty
Agency Costs, Charter Amendments And The Market For Corporate Control, Atreya Chakraborty
Atreya Chakraborty
The merger wave of the 1 980s, coupled with the sophistication of investment Banks' financial engineers, brought about a bewildering array of takeover defenses: "poison pills", " classified boards", "fair price amendments", and the like. Surveys have documented steep growth in various defensive amendments adopted by firms in recent years. The Investors? Responsibility Research Centre (IRRC), in surveying 424 of the Fortune 500 firms in 1986, found that 143 had adopted poison pills, 158 had fair price amendments and 223 had board of directors divided into classes. Jarrell and Poulsen's (1987) research notes the same trend in a previous survey …
Intensity Of Takeover Defenses: The Empirical Evidence, Atreya Chakraborty
Intensity Of Takeover Defenses: The Empirical Evidence, Atreya Chakraborty
Atreya Chakraborty
This paper focuses on the construction of an index of the intensity of firms' antitakeover defenses. While many aspects of corporate behavior are qualitative in nature, an evaluation of a firm's stance and the underlying motives for its behavior often depend on the elements of a set of qualitative factors. The interactions between these factors are likely to have important implications. In this context, only a composite measure will capture these interactions and their implications for firms' actions. We focus on the creation of an ordinal measure of anti-takeover defenses and utilize the ordered probit estimation technique to relate the …