Impact of Takeover Defenses on Managerial Incentives - Evidence from Copenhagen Stock Exchange

The article studies how takeover defenses influence managerial incentives with respect to long term investments, excess liquidity and the amount of debt relative to equity. The article conducts a cross sectional regression based on a sample of Danish listed firms, dealing explictly with the problem of causation between the variables. Takeover defenses adopted by Danish firms mainly consists of shares with dual class voting rights often in combination with foundation ownership. The article finds that protected firms have significantly less debt to equity. However, protected firms are not significantly more oriented towards the long term and do not have significantly more excess liquidity