Publication Type
Journal Article
Version
acceptedVersion
Publication Date
3-2020
Abstract
This paper examines the impact of investor protection laws on value creation in LBOs versus non-LBO takeovers. We find that value creation measured by takeover premium is significantly higher in countries with better investor protection. The value effect of investor protection laws is more pronounced for LBOs than non-LBO takeover transactions. Among LBOs, investor protection’s value effect is lower for club deals than others. These results suggest that institutional context and legal environment determine the extent of value creation for takeovers around the world.
Keywords
Leveraged buyouts, Legal environment, Law, Premium, Shareholder rights, Club deals, Value effect, Investor protection
Discipline
Corporate Finance | Finance and Financial Management
Research Areas
Finance
Publication
Journal of International Financial Markets, Institutions and Money
Volume
59
First Page
1
Last Page
18
Identifier
10.1016/j.intfin.2018.11.012
Publisher
Elsevier
Embargo Period
4-14-2021
Citation
CAO, Xiaping; CUMMINGS, Douglas; GOH, Jeremy C.; and WANG, Xiaoming.
The impact of investor protection law on global takeovers: LBO vs. non-LBO transactions. (2020). Journal of International Financial Markets, Institutions and Money. 59, 1-18.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6683
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.intfin.2018.11.012