Governed by design or decree? The dual origins of Takeover Defenses
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2025-08-28
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en
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This thesis examines how firm-specific takeover defenses and state-level takeover laws affect
firm value during M&A transac>ons. Using the contras>ng theories of managerial
entrenchment and shareholder value, it aims to assess whether these mechanisms enhance
or erode shareholder value.
The study analyzes a panel of 3,138 publicly listed U.S. firms involved in M&A ac>vity between
2002 and 2024. Employing fixed-effects regressions, it measures the impact of specific
defensive provisions and regulatory statutes on firm value, using Tobin’s Q as performance
proxy. Results of the analysis show that certain firm-level defenses nega>vely impact firm
value, suppor>ng the managerial entrenchment theory. State-level takeover laws,
contras>ngly, do not exhibit consistent posi>ve effects and may subs>tute rather than
complement internal governance mechanisms. Interac>on terms are sta>s>cally insignificant,
indica>ng that the mere existence of a mandate at the state level neither amplifies nor
dampens the influence of firm-adopted ATPs on Tobin’s Q.
The findings contribute to the corporate governance literature by clarifying the individual and
joint effects of external legal structures and internally implemented takeover defenses. The
final results suggest their impact is condi>onal rather than uniformly beneficial or harmful.
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Faculteit der Managementwetenschappen