shock to the threat of takeover to examine whether the market for corporate control has a real effect on firm-level stock … suggests that an active takeover market has a disciplining effect on managerial bad news hoarding and leads to lower future …

risk. Using a newly-developed takeover index from Cain, McKeon, and Solomon (2017) that comprehensively considers existing … state takeover laws, federal statutes, and state court standards of review along with a list of firm-specific and economic … variables, we find external takeover susceptibility reduces firms’ future stock price crash risk. This evidence is consistent …