Journal of Financial Economics Vol. 110 No. 3 2013
How do staggered boards affect shareholder value? Evidence from a natural experiment
Abstract
The well-established negative correlation between staggered boards (SBs) and firm value could be due to SBs leading to lower value or a reflection of low-value firms' greater propensity to maintain SBs. We analyze the causal question using a natural experiment involving two Delaware court rulings—separated by several weeks and going in opposite directions—that affected the antitakeover force of SBs. We contribute to the long-standing debate on staggered boards by presenting empirical evidence consistent with the market viewing SBs as leading to lower firm value for the affected firms.
- DOI
- 10.1016/j.jfineco.2013.08.005
- Volume
- 110
- Issue
- 3
- Pages
- 627-641
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref