We propose and test the value reversal hypothesis, which holds that takeover defenses that enhance value when a firm is young become costly over time. Consistent with this hypothesis, we find that (i) takeover defenses are sticky and are rarely removed, and (ii) the average relation between firm...

We propose and test an efficiency explanation for why firms deploy takeover defenses using initial public offering (IPO) firm data. We hypothesize that takeover defenses bond the firm's commitments by reducing the likelihood that an outside takeover will change the firm's operating strategy and...

We examine the labor market consequences for directors who adopt poison pills. Directors who become associated with pill adoption experience significant decreases in vote margins and increases in termination rates across all their directorships. They also experience a decrease in the likelihood...