| With the increasingly mature control market in China,hostile takeover events have occurred frequently in the capital market in recent years,and many listed companies have set up anti-takeover provisions in their articles of association.While the anti-takeover provisions play the role of resisting the transfer of control right in the capital market,how it affects the effectiveness of corporate governance is an important issue that the current academia and the capital market regulators pay attention to.According to the existing literature,the conclusions of studies on the economic consequences of anti-takeover provisions are inconsistent,and different competitive hypotheses such as "management defense hypothesis" and "long-term value creation hypothesis" have been formed.It is found that one of the important reasons lies in the lack of attention to the heterogeneity of anti-takeover provisions.From the perspective of capital market practice,the antitakeover provisions in the articles of association of listed companies in recent years are complicated.Some provisions are intended to protect shareholders from losing control from the specific content,which is consistent with the original intention of protecting the interests of shareholders of target companies in China’s Administrative Measures on Acquisition of Listed Companies,but others clearly reflect the defensive characteristics of the company’s managements.Moreover,there are great differences in the establishment of anti-takeover provisions of listed companies.Some companies mainly reflect the protection of shareholders’ interests,while others mainly reflect the defensive characteristics of managements.The establishment of anti-takeover provisions is the embodiment of the autonomy of the company’s articles of association,highlighting the protection of shareholders’ interests or management’s defense,reflecting the will and inclination of different interest subjects in the company,which to a large extent reflects the difference in the control rights of shareholders and managements.Therefore,the research on the economic consequences of anti-takeover provision needs to consider the heterogeneity of different provision and the impact of different interest subjects behind the establishment of provisions.This theses manually collates the data of anti-takeover provisions in the Articles of Association of Shanghai and Shenzhen A-share listed companies from 2009 to 2021,studies the relationship between the allocation of corporate control rights and the establishment of anti-takeover provisions in the Articles of Association under the background of Chinese system,and explores the reasons for the differences in the establishment of anti-takeover provisions in the Articles of Association of listed companies.In the research,the allocation mode of corporate control is divided into management control mode and shareholder control mode,and the anti-takeover provisions is divided into management defense provisions and shareholder protection provisions according to the essential characteristics and connotation of various antitakeover provisions.On this basis,first of all,starting from the motivation of the managements to maintain their own position security and shareholders to maintain their control position,this paper systematically analyzes the conflicts of interest between shareholders and managements in the process of anti-takeover,studies the tendency of the establishment of anti-takeover provisions under the management control mode and shareholder control mode,and further explores how different situational factors affect the allocation of corporate control rights and the establishment of anti-takeover provisions in the articles of association,and the market reaction of different anti-takeover provisions set up by the managements and shareholders.Secondly,taking the management’s mandatory change-performance sensitivity and the shareholder’s control over the voting result of the company’s proposal as the proxy variables for the stability of the management’s and shareholder’s control rights,this paper respectively explored whether the anti-takeover provisions that the managements and shareholders tend to set up have fully played a protective role in the establishment of the main body’s control rights,and further studied the heterogeneity of cross-sectional levels and the role of individual antitakeover provisions.Finally,the paper examines and compares the impact of antitakeover provisions on the corporate value under different control allocation modes,analyzes and tests the reasons for the differential impact of anti-takeover provisions on the corporate value under different control allocation modes from multiple perspectives,such as management’s short-sighted investment,management’s self-interest behavior and shareholder tunneling.The research found that:(1)The probability of management defense provisions taking up a higher proportion in corporate anti-takeover provisions under management control mode is 2.787 times that under shareholder control mode,indicating that companies have different tendencies to set up anti-takeover provisions under different control right allocation modes.Under the management control mode,the companies are more inclined to set up management defense provisions such as staggered board,director qualification examination,director nomination right restriction,and so on.Under the shareholder control mode,companies are more inclined to set up shareholder protection provisions such as absolute majority,restriction of proposal right,and so on.Further research shows that the relationship between the corporate control allocation mode and the establishment tendency of anti-takeover provisions is stronger when the agency conflict between managements and shareholders is stronger,the independence of the board is weaker,the competition in the product market is fiercer and there is no exchange concern and inquiry.In addition,the extensive research shows that investors have different market reactions to different anti-takeover provisions set up by managements and shareholders.The announcement of the establishment of shareholder protection provisions has a positive market reaction,while the announcement of the establishment of management defense provisions has a negative market reaction,reflecting investors’ negative emotions towards the defensive behavior of listed companies’ managements.(2)The two types of anti-takeover provisions give full play to the protection of the control rights of different subjects of managements and shareholders.Management defense provisions can reduce the sensitivity of managements forced change and performance,mainly by protecting the security of management’s position to consolidate its control.The shareholder protection provisions strengthen the shareholder’s control over the voting result of the company’s bill,and thus maintains the shareholder’s controlling position.The cross-sectional hierarchical heterogeneity test found that when a company is a private listed company,belongs to a high-tech industry,and has poorer internal governance and stronger stock liquidity,the protective effect of anti-takeover provisions on the management and shareholder control is more obvious.(3)Anti-takeover provisions set up under different control right allocation modes have different impacts on corporate value.The anti-takeover provisions set up under the management control mode damages the value of the company,while the anti-takeover provisions set up under the shareholder control mode does not damage the value of the company.It is found that the anti-takeover provisions in the management control mode does not improve the short-sightedness of the managements,but aggravates the self-serving behaviors of the managements such as excess compensation and in-service consumption.Under the shareholder control mode,the anti-takeover provisions can inhibit the hollowing out behavior of major shareholders and promote the long-term investment of the company,and will not aggravate the selfinterested behavior of the managements.The research of this theses has the characteristics of the cross integration of corporate finance and law,and its innovation mainly lies in:(1)Different from previous research that only focus on the economic consequences of anti-takeover provisions,this paper fully considers the heterogeneity of different anti-takeover provisions and explores the deeprooted reasons behind the establishment of differentiated provisions in different companies from the perspective of corporate control allocation,which is a further deepening of the research on anti-takeover provisions in articles of association.(2)Based on the essential characteristics and connotation of various anti-takeover provisions,divided them into management defense provisions and shareholder protection provisions,which overcomes the defect of existing literature that ignores the heterogeneity of different anti-takeover provisions and treats all anti-takeover provisions as homogenous.The innovation of this academic thought helps to understand the conflict of interest between managements and shareholders in the company’s anti-takeover strategy.(3)Based on the internal connection between motivation and result,and on the basis of analyzing and testing the differences in the establishment tendency of anti-takeover provisions of companies under different control allocation modes,this paper studies the impact of different types of anti-takeover provisions on the stability of management and shareholders’ control rights,forms a logical closed loop that links motives and results,and verifies the motives of managements and shareholders to establish different antitakeover provisions under different control allocation modes,which provides strong evidence support for the reasons why the managements and shareholders tend to set different anti-takeover provisions.(4)Study the differences of the impact of anti-takeover provisions on the corporate value under different control allocation modes,and analyze the reasons for the differences from the perspectives of management short-sighted investment,management self-interest behavior and shareholder tunneling,making up for the fact that the existing literature only indirectly infers support for the "management defense hypothesis" or "long-term value creation hypothesis" through the final impact of anti-takeover provisions on the corporate value,but lacks the evidence supporting from relationship between motivation and behavior,and the conclusion isn’t convincing enough.The theoretical significance of this research is as follows:(1)It is helpful to expand the research on the factors affecting the establishment of anti-takeover provisions in the articles of association.From the perspective of corporate control allocation,the research on the establishment of anti-takeover provisions under the two different corporate control allocation modes of management control and shareholder control is helpful to understand the conflict of interests between managements and shareholders in the establishment of anti-takeover provisions in the articles of association of the company,and provides a theoretical basis for explaining the differences in the establishment of anti-takeover provisions of different listed companies in practice.(2)It is helpful to deepen the research of the economic consequences of the establishment of anti-takeover provisions in the articles of association.Through the analysis of the reasons why anti-takeover provisions affect the difference of corporate value,this paper reveals the internal relationship between the establishment of anti-takeover provisions and the effectiveness of corporate governance under different control rights allocation modes,and provides a new way to understand the differences between different conclusions of economic consequences of anti-takeover provisions and various competing hypotheses.(3)It provides new theoretical evidence for the debate between "shareholder centrism" and "director centrism" corporate governance concepts.The research results of this paper,to some extent,reflect the impact of pursuing "shareholder centrism" and "director centrism" on the effectiveness of corporate governance and corporate value,which helps to expand and deepen corporate governance research,and has enlightenment and reference significance for the formation of new understanding and thinking on the construction and design of corporate governance system.The practical significance of this study is as follows:(1)It provides useful reference for listed companies to optimize the allocation of control rights,standardize the antitakeover provisions of the articles of association,and improve the level of corporate governance.Studying the relationship between the allocation of corporate control rights and the establishment of anti-takeover provisions in the articles of association will help to point out the direction for the target company to make scientific anti-takeover decisions and establish normative anti-takeover provisions,avoid conflicts and inefficiencies caused by the unclear rights and obligations of shareholders and managements in the process of anti-takeover,improve the level of corporate governance and promote the development of the company.(2)It helps the regulatory authorities to formulate regulatory measures and promote the protection of small and medium-sized investors.The power structure of the managements and shareholders has an important impact on the company’s decision-making.The research in this paper will help deepen investors’ understanding and understanding of anti-takeover in China’s capital market from the perspective of the allocation of corporate control,and provide valuable policy recommendations for promoting the protection of investors’ interests and strengthening the pertinence of supervision by regulatory authorities.(3)It has an enlightening effect on promoting the development of the capital market and deepening the reform of corporate governance.On the one hand,the research of this paper will help to provide theoretical support for the improvement of the anti-takeover regulations of listed companies,so as to better adapt to and promote the development of the capital market;On the other hand,just as a new round of revision of the Company Law of the People’s Republic of China is coming,the research in this paper will help to provide theoretical and empirical references for the consideration of the applicability of the two corporate governance models of "director-centrism" and "shareholder centrism" in the context of corporate anti-takeover in China. |
