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Do hostile takeover threats matter? Evidence from credit ratings
Exploiting a novel measure of takeover vulnerability mainly based on state legislations, we explore the effect of hostile takeover threats on credit ratings. Our results reveal that companies with more takeover exposure are assigned significantly better credit ratings. In particular, a rise in takeo...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2022
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8797189/ https://www.ncbi.nlm.nih.gov/pubmed/35089950 http://dx.doi.org/10.1371/journal.pone.0260688 |
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author | Chatjuthamard, Pattanaporn Ongsakul, Viput Jiraporn, Pornsit |
author_facet | Chatjuthamard, Pattanaporn Ongsakul, Viput Jiraporn, Pornsit |
author_sort | Chatjuthamard, Pattanaporn |
collection | PubMed |
description | Exploiting a novel measure of takeover vulnerability mainly based on state legislations, we explore the effect of hostile takeover threats on credit ratings. Our results reveal that companies with more takeover exposure are assigned significantly better credit ratings. In particular, a rise in takeover vulnerability by one standard deviation results in an improvement in credit ratings by 7.89%. Our findings are consistent with the view that the disciplinary mechanism associated with the takeover market mitigates agency problems and ultimately raises firm value. Further analysis corroborates our conclusion, including propensity score matching, entropy balancing, and an instrumental-variable analysis. As our proxy for takeover susceptibility is plausibly exogenous, our results are more likely to show a causal effect. |
format | Online Article Text |
id | pubmed-8797189 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2022 |
publisher | Public Library of Science |
record_format | MEDLINE/PubMed |
spelling | pubmed-87971892022-01-29 Do hostile takeover threats matter? Evidence from credit ratings Chatjuthamard, Pattanaporn Ongsakul, Viput Jiraporn, Pornsit PLoS One Research Article Exploiting a novel measure of takeover vulnerability mainly based on state legislations, we explore the effect of hostile takeover threats on credit ratings. Our results reveal that companies with more takeover exposure are assigned significantly better credit ratings. In particular, a rise in takeover vulnerability by one standard deviation results in an improvement in credit ratings by 7.89%. Our findings are consistent with the view that the disciplinary mechanism associated with the takeover market mitigates agency problems and ultimately raises firm value. Further analysis corroborates our conclusion, including propensity score matching, entropy balancing, and an instrumental-variable analysis. As our proxy for takeover susceptibility is plausibly exogenous, our results are more likely to show a causal effect. Public Library of Science 2022-01-28 /pmc/articles/PMC8797189/ /pubmed/35089950 http://dx.doi.org/10.1371/journal.pone.0260688 Text en © 2022 Chatjuthamard et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. |
spellingShingle | Research Article Chatjuthamard, Pattanaporn Ongsakul, Viput Jiraporn, Pornsit Do hostile takeover threats matter? Evidence from credit ratings |
title | Do hostile takeover threats matter? Evidence from credit ratings |
title_full | Do hostile takeover threats matter? Evidence from credit ratings |
title_fullStr | Do hostile takeover threats matter? Evidence from credit ratings |
title_full_unstemmed | Do hostile takeover threats matter? Evidence from credit ratings |
title_short | Do hostile takeover threats matter? Evidence from credit ratings |
title_sort | do hostile takeover threats matter? evidence from credit ratings |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8797189/ https://www.ncbi.nlm.nih.gov/pubmed/35089950 http://dx.doi.org/10.1371/journal.pone.0260688 |
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