Managerial turnover and leverage under a takeover threat

Detalhes bibliográficos
Autor(a) principal: Novaes, Walter
Data de Publicação: 2000
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
Texto Completo: http://hdl.handle.net/10438/12272
Resumo: How do shareholders perceive managers who lever up under a takeover threat? Increasing leverage conveys good news if it reflects management's ability to enhance value. It conveys bad news, though, if inefficient managers are more pressured to lever up. This paper demonstrates that negative (positive) updating prevails when takeover costs are small (large). Managers who leve r up to end a takeover threat thus may commit to an increase in the firm's value and yet increase their chances of being replaced by their shareholders. The model predicts that intraindustry leverage is less dispersed when takeover costs are low.
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spelling Novaes, WalterEscolas::EPGEFGV2014-10-29T13:50:06Z2014-10-29T13:50:06Z2000-08-31http://hdl.handle.net/10438/12272How do shareholders perceive managers who lever up under a takeover threat? Increasing leverage conveys good news if it reflects management's ability to enhance value. It conveys bad news, though, if inefficient managers are more pressured to lever up. This paper demonstrates that negative (positive) updating prevails when takeover costs are small (large). Managers who leve r up to end a takeover threat thus may commit to an increase in the firm's value and yet increase their chances of being replaced by their shareholders. The model predicts that intraindustry leverage is less dispersed when takeover costs are low.engEscola de Pós-Graduação em Economia da FGVSeminários de pesquisa econômica da EPGETodo cuidado foi dispensado para respeitar os direitos autorais deste trabalho. Entretanto, caso esta obra aqui depositada seja protegida por direitos autorais externos a esta instituição, contamos com a compreensão do autor e solicitamos que o mesmo faça contato através do Fale Conosco para que possamos tomar as providências cabíveisinfo:eu-repo/semantics/openAccessManagerial turnover and leverage under a takeover threatinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleEconomiaSociedades comerciais - Finançasreponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVORIGINAL000302966.pdf000302966.pdfapplication/pdf1637755https://repositorio.fgv.br/bitstreams/51cbc114-5624-4955-89ff-846d90bcfca6/downloadac62e8b817e3f26f96dc9de4210b4221MD51LICENSElicense.txtlicense.txttext/plain; charset=utf-84707https://repositorio.fgv.br/bitstreams/c01a9054-9595-412e-aac0-af0ad7fbc78c/downloaddfb340242cced38a6cca06c627998fa1MD52TEXT000302966.pdf.txt000302966.pdf.txtExtracted 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dc.title.eng.fl_str_mv Managerial turnover and leverage under a takeover threat
title Managerial turnover and leverage under a takeover threat
spellingShingle Managerial turnover and leverage under a takeover threat
Novaes, Walter
Economia
Sociedades comerciais - Finanças
title_short Managerial turnover and leverage under a takeover threat
title_full Managerial turnover and leverage under a takeover threat
title_fullStr Managerial turnover and leverage under a takeover threat
title_full_unstemmed Managerial turnover and leverage under a takeover threat
title_sort Managerial turnover and leverage under a takeover threat
author Novaes, Walter
author_facet Novaes, Walter
author_role author
dc.contributor.unidadefgv.por.fl_str_mv Escolas::EPGE
dc.contributor.affiliation.none.fl_str_mv FGV
dc.contributor.author.fl_str_mv Novaes, Walter
dc.subject.area.por.fl_str_mv Economia
topic Economia
Sociedades comerciais - Finanças
dc.subject.bibliodata.por.fl_str_mv Sociedades comerciais - Finanças
description How do shareholders perceive managers who lever up under a takeover threat? Increasing leverage conveys good news if it reflects management's ability to enhance value. It conveys bad news, though, if inefficient managers are more pressured to lever up. This paper demonstrates that negative (positive) updating prevails when takeover costs are small (large). Managers who leve r up to end a takeover threat thus may commit to an increase in the firm's value and yet increase their chances of being replaced by their shareholders. The model predicts that intraindustry leverage is less dispersed when takeover costs are low.
publishDate 2000
dc.date.issued.fl_str_mv 2000-08-31
dc.date.accessioned.fl_str_mv 2014-10-29T13:50:06Z
dc.date.available.fl_str_mv 2014-10-29T13:50:06Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
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dc.identifier.uri.fl_str_mv http://hdl.handle.net/10438/12272
url http://hdl.handle.net/10438/12272
dc.language.iso.fl_str_mv eng
language eng
dc.relation.ispartofseries.por.fl_str_mv Seminários de pesquisa econômica da EPGE
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.publisher.none.fl_str_mv Escola de Pós-Graduação em Economia da FGV
publisher.none.fl_str_mv Escola de Pós-Graduação em Economia da FGV
dc.source.none.fl_str_mv reponame:Repositório Institucional do FGV (FGV Repositório Digital)
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