In this paper, we investigate the effectiveness of two main corporate governance mechanisms, namely the board of directors and auditing, in mitigating the equity discounts arising from the potential entrenchment problem between inside and outside shareholders. Overall, the empirical results...

This study investigates whether the market's perception of auditor quality makes a difference to the market value of a firm using a sample of 1 915 takeover offers in the USA over the period 1990 to 2005. The study finds, as hypothesised, that the takeover process makes a smaller correction to...