Share class structure and the efficiency of corporate takeover : an experiment
This research paper tests the theoretical conclusions of Grossman and Hart (1988) through a laboratory experimental approach. Six treatment variations were designed to study the efficiency of management under three dimensions: share structures (one-share-one-vote and dual-class share structure), the...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Final Year Project (FYP) |
| Language: | English |
| Published: |
2019
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/76668 |
| _version_ | 1826128017628332032 |
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| author | Tan, Alicia Yan Xiu Chan, Sharmain Laksmi Cahyady |
| author2 | Bao Te |
| author_facet | Bao Te Tan, Alicia Yan Xiu Chan, Sharmain Laksmi Cahyady |
| author_sort | Tan, Alicia Yan Xiu |
| collection | NTU |
| description | This research paper tests the theoretical conclusions of Grossman and Hart (1988) through a laboratory experimental approach. Six treatment variations were designed to study the efficiency of management under three dimensions: share structures (one-share-one-vote and dual-class share structure), the presence of an open market and the use of proration. The experiment was conducted through a computerised asset market using a continuous double auction and unrestricted and restricted tender offer market. Through the trading game, the Incumbent and Raider battled for the control of the firm. Our experiment results were not in line with our hypothesis. From our experiment, we obtain these results: (i) Number of successful tender offers were independent on share structure, (ii) In the presence of a market, there were fewer successful tender offers and (iii) Proration results in a significantly lower percentage of successful tender offers by the efficient Raider in a dual class share structure compared to a one-share-one-vote share structure. |
| first_indexed | 2024-10-01T07:18:00Z |
| format | Final Year Project (FYP) |
| id | ntu-10356/76668 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T07:18:00Z |
| publishDate | 2019 |
| record_format | dspace |
| spelling | ntu-10356/766682019-12-10T13:22:08Z Share class structure and the efficiency of corporate takeover : an experiment Tan, Alicia Yan Xiu Chan, Sharmain Laksmi Cahyady Bao Te Yohanes Eko Riyanto School of Social Sciences DRNTU::Social sciences::Economic theory::Microeconomics This research paper tests the theoretical conclusions of Grossman and Hart (1988) through a laboratory experimental approach. Six treatment variations were designed to study the efficiency of management under three dimensions: share structures (one-share-one-vote and dual-class share structure), the presence of an open market and the use of proration. The experiment was conducted through a computerised asset market using a continuous double auction and unrestricted and restricted tender offer market. Through the trading game, the Incumbent and Raider battled for the control of the firm. Our experiment results were not in line with our hypothesis. From our experiment, we obtain these results: (i) Number of successful tender offers were independent on share structure, (ii) In the presence of a market, there were fewer successful tender offers and (iii) Proration results in a significantly lower percentage of successful tender offers by the efficient Raider in a dual class share structure compared to a one-share-one-vote share structure. Bachelor of Arts in Economics 2019-04-02T08:29:17Z 2019-04-02T08:29:17Z 2019 Final Year Project (FYP) http://hdl.handle.net/10356/76668 en 51 p. application/pdf |
| spellingShingle | DRNTU::Social sciences::Economic theory::Microeconomics Tan, Alicia Yan Xiu Chan, Sharmain Laksmi Cahyady Share class structure and the efficiency of corporate takeover : an experiment |
| title | Share class structure and the efficiency of corporate takeover : an experiment |
| title_full | Share class structure and the efficiency of corporate takeover : an experiment |
| title_fullStr | Share class structure and the efficiency of corporate takeover : an experiment |
| title_full_unstemmed | Share class structure and the efficiency of corporate takeover : an experiment |
| title_short | Share class structure and the efficiency of corporate takeover : an experiment |
| title_sort | share class structure and the efficiency of corporate takeover an experiment |
| topic | DRNTU::Social sciences::Economic theory::Microeconomics |
| url | http://hdl.handle.net/10356/76668 |
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