This paper examines the effect of the benefits of corporate control to managers on the relationship between managerial … the acquiring firm increases, the interests of managers are more closely aligned with those of shareholders, reducing the … acquisition premium. At sufficiently high levels of managerial ownership, managers value a reduction in the risk of their …

, when it buys a rapidly growing target , and when the performance of its managers has been poor before the acquisition …

change: internally precipitated management turnover, hostile takeover, and friendly takeover. We find that firms experiencing … is also weaker evidence that hostile takeover targets underperform their industry peers. We interpret this evidence as … consistent with the idea that the board of directors is capable of firing managers whose leadership leads to poor performance …

hostile bidders to win a vote of shareholder support -- boards should not have veto power over takeover bids. The paper … decisions, directors' superior information, bargaining by management, pressures on managers to focus on the short …

disposal. Since the threat of governance, not just actual governance, can discipline managers, we use Section 13 filings to …

-controlling investors. This, in turn, increases the acquirer's capacity to raise outside funds to finance the takeover. Absent effective … effective competition, the increased outside funding capacity makes it less likely that the takeover outcome is determined by … to create value. Accordingly, stronger legal investor protection can improve the efficiency of the takeover outcome …