Publications
Publications
- 2015
- HBS Working Paper Series
Staggered Boards and Shareholder Value: A Reply to Amihud and Stoyanov
By: Alma Cohen and Charles C.Y. Wang
Abstract
In a paper published in the Journal of Financial Economics in 2013, we provided evidence that market participants perceive staggered boards to be on average value-reducing. In a recent response paper, Amihud and Stoyanov (2015) “contest” our results. They advocate using alternative methods for estimating risk-adjusted returns and excluding some observations from our sample. Amihud and Stoyanov claim that making such changes renders our results not significant (though retaining their direction) and conclude that staggered boards have no significant effect on firm value. This paper examines and replies to the Amihud-Stoyanov challenge. We question their methodological claims, study the consequences of following their suggestions, and conduct additional robustness tests. Our analysis shows that the evidence is overall consistent with the results and conclusions of our JFE paper.
Keywords
Staggered Boards; Takeover Defense; Antitakeover Provision; Firm Value; Agency Costs; Delaware; Chancery Court; Airgas; Governing and Advisory Boards; Acquisition; Corporate Governance; Business and Shareholder Relations; Delaware
Citation
Cohen, Alma, and Charles C.Y. Wang. "Staggered Boards and Shareholder Value: A Reply to Amihud and Stoyanov." Harvard Business School Working Paper, No. 16-097, February 2016.
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