Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105507
Authors: 
Dickerson, Andrew P.
Gibson, Heather D.
Tsakalotos, Euclid
Year of Publication: 
1998
Series/Report no.: 
Department of Economics Discussion Paper, University of Kent 9803
Abstract: 
This paper investigates the determinants of takeovers in a large sample of UK quoted companies. We focus on the channels through which the market for corporate control monitors company performance and discretionary managerial behaviour. Our results indicate that the market for corporate control disciplines poorly performing companies, and that this effect is quantitatively important: a one standard deviation increase in profitability is associated with a fall in the conditional probability of takeover of over 20%. However, we find no evidence that firms without apparent profitable investment opportunities are more likely to be taken over if managers increase investment or reduce dividends, contrary to the predictions of the free cash-flow theory of takovers.
Subjects: 
Takovers
Market for Corporate Control
Hazard Functions
JEL: 
L1
G3
C41
Document Type: 
Working Paper

Files in This Item:
File
Size
131.3 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.