Correction to: Corporate governance and employee treatment: Evidence from takeover defenses

This study investigates if antitakeover provisions are a value-enhancing indicator of corporate governance by estimating the effect of takeover susceptibility to labor litigations. Using a unique hand-collected dataset of employee lawsuits, we find a positive relationship between employee litigation...

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Bibliographic Details
Published in:Journal of economics and finance 2020-04, Vol.44 (2), p.392-416
Main Authors: Unsal, Omer, Rayfield, Blake
Format: Article
Language:English
Subjects:
Correction
Economics
Economics and Finance
Finance
Macroeconomics/Monetary Economics//Financial Economics
Citations: Items that this one cites
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Summary:This study investigates if antitakeover provisions are a value-enhancing indicator of corporate governance by estimating the effect of takeover susceptibility to labor litigations. Using a unique hand-collected dataset of employee lawsuits, we find a positive relationship between employee litigation and takeover protection. We document that employee lawsuits increase a firm’s susceptibility to a hostile takeover. In addition, we document that higher costs of litigation, measured by fees and case duration, increase the firms’ suitability to takeover. Our results indicate that takeover protections may decrease corporate attention to employees. This effect may be because entrenched managers may avoid long-term investment in stakeholders and enjoy “the quiet life” following the reduced threat of a hostile takeover.
ISSN:1055-0925
1938-9744
DOI:10.1007/s12197-019-09486-4