Journal of Financial and Quantitative Analysis Vol. 43 No. 2 2008
Corporate Governance, Shareholder Rights, and Shareholder Rights Plans: Poison, Placebo, or Prescription?
open access
Abstract
We examine the effect of poison pill adoptions on firm value, controlling for the adopting firm's preexisting corporate governance structure. We find that only companies with the most democratic governance structures, defined as those with the fewest preexisting protective governance provisions, experience significantly positive abnormal stock returns and significantly positive abnormal revisions in five-year earnings growth rate forecasts. Moreover, regression results indicate that abnormal returns and forecast revisions are significantly related to governance structure and not to board composition or subsequent merger activity.
- DOI
- 10.1017/s0022109000003562
- Volume
- 43
- Issue
- 2
- Pages
- 381-400
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref