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announcements of takeover rumors that do not materialize. Such speculative news may hurt productivity because uncertainty and threat … of job loss cause anxiety, distraction, and reduced commitment among employees and managers. Consistently, we observe a … effects of speculative financial news and the costs of takeover threats. …
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We propose a framework that advances our understanding of CEO retention decisions in misreporting firms. Consistent with economic intuition, outside directors are more likely to fire (retain) CEOs when retention (replacement) costs are high relative to replacement (retention) costs. When the...
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