How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment

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How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment

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Title: How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment
Author: Cohen, Alma; Wang, Changyi Chang-Yi

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Citation: Cohen, Alma, and Charles C.Y. Wang. "How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment." Journal of Financial Economics 110, no. 3 (December 2013): 627–641.
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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 documenting empirical evidence consistent with the market viewing SBs as leading to lower firm value for the affected firms.
Published Version: http://www.sciencedirect.com/science/article/pii/S0304405X13002067
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:28538428
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