Does the threat of takeover affect default risk?

dc.contributor.affiliationUnitec,Te Pūkengaen_NZ
dc.contributor.affiliationTe Pūkengaen_NZ
dc.contributor.affiliationLa Trobe Universityen_NZ
dc.contributor.affiliationMonash Universityen_NZ
dc.contributor.affiliationVictoria University of Wellingtonen_NZ
dc.contributor.authorBalachandran, B.
dc.contributor.authorDuong, H. N.
dc.contributor.authorvan Zijl, T.
dc.contributor.authorZudana, Arfian
dc.date.accessioned2023-10-31T01:09:42Z
dc.date.available2023-10-31T01:09:42Z
dc.date.issued2022-10-23
dc.date.updated2023-10-26T13:30:08Z
dc.description.abstractWe examine the impact of the threat of takeovers on default risk. Using a sample of 50,189 firm-year observations for US firms over the period 1990–2015, we find that the threat of takeovers has a negative relation with default risk. We use difference-in-difference analysis to address potential endogeneity concerns and propensity score matching to control for self-selection bias. The results are robust to alternative measures of default risk and exclusion of the dot com and financial crisis periods. Our results also hold after controlling for Governance Index and Entrenchment Index. We identify improvement in performance and earnings quality in response to the threat of takeovers as channels underlying our main result. The effect of the threat of takeovers on default risk is more pronounced for firms with opaque information environment and low institutional ownership. Our findings provide important insights for the market for corporate control as a disciplining mechanism in reducing default risk.en_NZ
dc.identifier.bibliographicCitationBalachandran, B., Duong, H. N., van Zijl, T., & Zudana, A. E. (2022). Does the threat of takeover affect default risk?. Journal of Business Finance & Accounting, 00, 1– 40. doi:https://doi.org/10.1111/jbfa.12668en_NZ
dc.identifier.doidoi:https://doi.org/10.1111/jbfa.12668en_NZ
dc.identifier.issn0306-686X
dc.identifier.issn1468-5957
dc.identifier.urihttps://hdl.handle.net/10652/6122
dc.language.isoenen_NZ
dc.publisherWileyen_NZ
dc.relation.urihttps://onlinelibrary.wiley.com/doi/full/10.1111/jbfa.12668en_NZ
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International*
dc.rights.holderWileyen_NZ
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/*
dc.subjectUnited Statesen_NZ
dc.subjectcorporate managementen_NZ
dc.subjectconsolidation and merger of corporationsen_NZ
dc.subjectdefault risksen_NZ
dc.subject.marsden3507 Strategy, management and organisational behaviouren_NZ
dc.titleDoes the threat of takeover affect default risk?en_NZ
dc.typeJournal Articleen_NZ
unitec.author.disciplineSchool of Applied Business
unitec.author.firstnameArfian
unitec.author.lastnameZudana
unitec.author.pathwayUnitec
unitec.author.staffid1567682
unitec.identifier.roms70631en_NZ
unitec.institution.studyareaAccounting and Financeen_NZ
unitec.peerreviewedyesen_NZ
unitec.publication.lpage40en_NZ
unitec.publication.placeNew Yorken_NZ
unitec.publication.spage1en_NZ
unitec.publication.titleJournal of Business Finance & Accountingen_NZ
unitec.publication.volume00en_NZ
Files
Original bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
Balachandran, B. (2022).pdf
Size:
410.83 KB
Format:
Adobe Portable Document Format
Description:
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
501 B
Format:
Item-specific license agreed upon to submission
Description: