We propose and test an efficiency explanation for why firms deploy takeover defenses using initial public offering (IPO) firm data. We hypothesize that takeover defenses bond the firm's commitments by reducing the likelihood that an outside takeover will change the firm's operating strategy and...

Many researchers use the G-index or E-index to measure firms' takeover defenses. Others argue that these indices are not related to firms' takeover likelihoods. We find that, unlike their raw values, the instrumented versions of these indices are significantly and negatively related to...

We examine the labor market consequences for directors who adopt poison pills. Directors who become associated with pill adoption experience significant decreases in vote margins and increases in termination rates across all their directorships. They also experience a decrease in the likelihood...