The Wealth Effect of Adopting Anti-Takeover Defences : Evidence from a Meta Analysis

We use meta-analysis techniques to compile and analyze findings assessing the effect of the adoption of antitakeover defenses (ATDs) on existing shareholders' wealth. 51 papers were examined to construct a sample of 89 observations, covering nearly 16,000 cases of ATD adoptions mostly in the United States. Meta-analysis revealed that it does not matter whether an ATD is adopted, but rather in what context. Neither managerial entrenchment nor shareholder interest theory can be supported unconditionally. However, a number of moderators impact the wealth impact of ATD adoptions such as the strength of a corporation's corporate governance structure, whether or not the firm is subject to takeover threats at the time of adoption, and how the proposal is framed and implemented. The analysis of publication characteristics in the field does not suggest any serious biases