JFR1992 ANTITAKEOVER CHARTER AMENDMENTS EFFECTS ON CORPORATE DECISIONS外语英文电子书.pdfVIP

The Journal of Financial Research • Vol . XV, No . 1 • Spring 1992 ANTITAKEOVER CHARTER AMENDMENTS: EFFECTS ON CORPORATE DECISIONS William N. Pugh, Daniel E. Page, John S. Jahera, Jr. Auburn University Abstract In recent years many shareholders have voted to amend their corporate charters to decrease the likelihood of a hostile takeover. Critics of antitakeover amendments argue that by sheltering management from the market for corporate control, management may become entrenched and be less likely to act in the best interest of shareholders. The counter argument holds that the threat of a hostile takeover and possible job loss may move management toward short-sighted decision making. In this study we test the hy- pothesis that, upon passage of antitakover amendments, managers adopt a longer-term view with respect to capital expenditures and research and development. Empirical re- sults support the hypothesis, as both capital expenditures and research development dis- play significant increases relative to the year of enactment. I. Introduction In recent years many shareholders have voted to amend their corporate char- ters to decrease the likelihood of a hostile takeover. Such amendments make a management-opposed change in ownership more difficult for, and more costly to, a corporate raider. Critics of antitakeover charter amendments argue that by shel- tering management from the market for corporate control, management may be- come entrenched and be less likely to act in the best interest of shareholders (see Jensen and Meckling (1976), Jensen and Ruback (1983)). However, Scherer (1988), arguing a