The nature of discipline by corporate takeovers

Omesh Kini, William Kracaw, Shehzad Mian

Research output: Contribution to journalReview articlepeer-review

71 Scopus citations

Abstract

This paper provides a comprehensive examination of the disciplinary role of the corporate takeover market using a sample of U.S. target firms over the period 1979 to 1998. The time period spanned allows a broader study not only of the disciplinary role of the takeover market in general, but also of the interaction between the takeover market and alternative governance mechanisms during the 1980s and 1990s. Overall, our evidence is consistent with the view of the corporate takeover market as a "court of last resort," that is, it is an external source of discipline that intercedes when internal control mechanisms are relatively weak or ineffective.

Original languageEnglish (US)
Pages (from-to)1511-1552
Number of pages42
JournalJournal of Finance
Volume59
Issue number4
DOIs
StatePublished - Aug 2004

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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