Review of Economic Studies Vol. 55 No. 2 1988
The Disciplinary Role of Takeovers
Abstract
This paper presents a theory of the disciplinary role of takeovers based on an explicit model of managerial incentive problems stemming from a symmetric information. It is argued that an informed raider can reduc e incentive problems by making managerial compensation more sensitive to information unavailable to shareholders. The paper also highlight s the importance of specifying the source of contractual inefficienci es when analyzing the effect of takeovers on incentives.
- DOI
- 10.2307/2297576
- Volume
- 55
- Issue
- 2
- Pages
- 185
- Sources
- bibtex:phds-export.bib crossref openalex