Masulis, Wang, and Xie (2007)

Masulis, Ronald W., Cong Wang and Fei Xie. "Corporate Governance and Acquirer Returns". Journal of Finance, August 2007.

From the authors’ abstract: “We examine whether corporate governance mechanisms…affect the profitability of firm acquisitions. We find that acquirers with more anti-takeover provisions experience significantly lower announcement-period stock returns than other acquirers. We also find that acquiring firms operating in more competitive industries or separating the positions of CEO and chairman of the board experience higher abnormal announcement returns. Our results support the hypothesis that managers protected by more anti-takeover provisions face weaker discipline from the market for corporate control and thus, are more likely to indulge in empire-building acquisitions that destroy shareholder value.”

lk comment: First seen as 2005 working paper. The European Centre for Sustainable Finance (ECCE) included this paper in its report “2007-2008 Top Studies on ESG”.

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=697501

Link to published version: https://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2007.01259.x