Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338629 
Year of Publication: 
2026
Series/Report no.: 
I4R Discussion Paper Series No. 285
Publisher: 
Institute for Replication (I4R), s.l.
Abstract: 
Corporate Opportunity Waiver (COW) laws permit firms to suspend fiduciary duties related to corporate opportunities. Fich, Harford, and Tran (2023) argue that these laws reduced firm innovation and lowered corporate valuation for research-intensive firms. However, we find that over 90% of the regressions we re-examine are non-replicable using correct samples and specifications. We further show that the reported decline in Tobin's q is confounded by the effects of the dot-com bubble burst. Moreover, public firms subject to COWs reduce takeover defenses, contradicting their argument that COW laws weaken corporate governance. Overall, their conclusion that COW laws foster managerial disloyalty and harm shareholder value is not supported by the data.
Subjects: 
COW laws
fiduciary duties
shareholder value
innovation
JEL: 
G34
G38
O34
Document Type: 
Working Paper

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