Carroll, Carolyn; Griffith, John M.; Rudolph, Patricia M. - In: Managerial and Decision Economics 20 (1999) 3, pp. 163-171
We examine the hypothesis that white knights enter control contests to spend free cash flow instead of paying it out to shareholders. Tobin's q is used to measure management's inclination to invest in negative NPV investments. We find that historically, white knights have over-invested and their...