The commitment value of takeover defenses

摘要

We investigate how takeover defenses can facilitate a firm's value-increasing stakeholder relationships by bonding its commitment to respect stakeholders' appropriable quasi-rents in the firm. For this purpose, we develop two variations of the B-index of takeover defenses which are specifically designed to capture the bonding benefit of takeover defenses. We find evidence that some takeover defenses, but not all, provide a bonding benefit in terms of facilitation of a firm's value-increasing stakeholder relationships. This implies that a firm must selectively adopt the most effective takeover defenses to achieve the desired corporate goals.