Shark Repellents and Managerial Myopia: An Empirical Test

Meulbroek, Lisa K.; Mitchell, Mark L.; Mulherin, J. Harold; Netter, Jeffry M.; Poulsen, Annette B.

doi:10.1086/261721

Cited by 168 publications

(98 citation statements)

References 13 publications

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“…Unfortunately there is little literature on the direct impact of expanded boards or of tighter corporate governance more generally on innovation. While earlier literature found a negative relationship between anti-takeover provisions and innovation investments (e.g., Meulbroek, et al 1990), a recent study (O'Connor & Rafferty, 2012) finds no relation between broad measures of corporate governance and innovation levels once simultaneity is taken into account in their empirical models.…”

Section: Literaturementioning

confidence: 84%

Entrepreneurial Exits and Innovation

2014

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We examine how IPOs and acquisitions affect entrepreneurial innovation as measured by patent counts and forward patent citations. We construct a firm-year panel dataset of all venture capital-backed biotechnology firms founded between 1980 and 2000, tracked yearly through 2006. We address the possibility of unobserved self-selection into exit mode by using coarsened exact matching (CEM), and in two additional ways: (1) we compare firms that filed for an IPO (or announced a merger) with those who did not complete the transaction for reasons unrelated to innovation, and (2) we use an instrumental variables approach based on the relative level of IPO versus acquisitions market "heat". Our across-and within-mode results are consistent with altered project selection and incentives associated with differing levels of information disclosure to outsiders shaping innovation outcomes. These firm-level results are not explained by an alternative mechanism of inventor-level turnover following exit events.

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Section: Literaturementioning

confidence: 84%

Entrepreneurial Exits and Innovation

2014

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“…In terms of R&D, managers in the United States or in France, for example, are likely to either choose to comply with their national accountancy schemes or to 2 Some empirical works considered a global set of anti-takeover provisions likely to encompass many entrenchment practices. The different practices, especially the voting rules, are however not disentangled in these contributions where anti-takeover practices were found to be either detrimental (Meulbroek et al, 1990), neutral (Johnson and Rao, 1997) or positive (Pugh et al, 1992) for R&D intensity.…”

Section: Randd Decisions and The Defense Of Shareholders' Rightsmentioning

confidence: 98%

The impact of corporate governance practices on R&D efforts: a look at shareholders' rights, cross-listing, and control pyramid

Lhuillery¹

2011

Industrial and Corporate Change

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The article considers the impact of multiple shareholder-oriented governance practices on R&D decisions. Based on a sample of 5528 firms belonging to 110 large French listed business groups, our results substantiate the idea that shareholder-oriented governance practices and a lower position in a control pyramid are better for R&D investment. The introduction of any additional shareholder oriented practice is found to result in more R&D. We show, however, that this Anglo-Americanization of the French corporate governance system is only partial.We provide evidence of the co-existence of an old French system of corporate governance with a hybrid model of corporate governance. The lack of concrete results on complementarity among shareholder-oriented governance practices casts doubt on the stability of this hybrid model in the French context. JEL classification: G34, O31, O32.

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“…Meulbroek et al (1990) show that firms decrease R&D expenditures after adopting anti-takeover amendments. However, Pugh et al (1992) find evidence that R&D expenditures rise after amendment adoptions.…”

Section: Relation To the Existing Literaturementioning

confidence: 99%

Do Anti-Takeover Provisions Spur Corporate Innovation?

Chemmanur

Tian

2012

SSRN Journal

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We study the relation between antitakeover provisions (ATPs) and corporate innovation, and show that ATPs affect firm value through a novel "innovation channel." We find that firms with a larger number of ATPs are more innovative. To establish causality, we use a regression discontinuity approach relying on "locally" exogenous variation in the number of ATPs generated by governance proposal votes that pass or fail by a small voter margin, as well as an instrumental variable approach. The evidence suggests that ATPs spur innovation and thus allow long-run value creation by insulating managers from short-term pressures arising from the equity market.

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Shark Repellents and Managerial Myopia: An Empirical Test

Cited by 168 publications

References 13 publications

Entrepreneurial Exits and Innovation

Entrepreneurial Exits and Innovation

The impact of corporate governance practices on R&D efforts: a look at shareholders' rights, cross-listing, and control pyramid

Do Anti-Takeover Provisions Spur Corporate Innovation?

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