Antitakeover Provisions And R&D Investment

Recently,hostile takeover events have occurred in capital market frequently.After the acquirer enters the target company,it usually interferes with the appointment and removal of the management of the company,resulting in damage to the stable operation of the company.In order to deal with hostile takeover events,some companies choose to set anti-takeover provisions in the articles of incorporation,increasing takeover difficulty of the takeover companies,and then against the hostile takeover.When setting up less anti-takeover provisions,the company will also face a risk of hostile takeover,the management may be for their own job security,investing the rapid increase in the value of some short-term projects to reduce long-term project investment,in order to increase the takeover difficulty.On the contrary,when setting up more anti-takeover provisions,the threat of hostile takeover will reduce,managers may not have to worry too much to lost the existing positions because of company was acquired,so managers may choose to benefit the company's long-term value,such as R&D investment.This paper selects 2007-2015 Chinese listed companies as research samples,uses the method of empirical test,study the effect of anti-takeover provisions on R&D investment.The results show that the more the anti-takeover provisions be,the higher the R&D investment level be.Further more,when the degree of the product market competition is low,anti-takeover provision has a stronger positive effect on R&D investment.In addition,the enterprise of high-tech industry relative to the low-tech industry enterprise,has more significant positive correlation,and the promoting effect is more obvious in non-state-owned enterprises than state-owned enterprises.Finally,after using the Tobit regression method and replacing the substitution variables of R&D investment,the result was still robust.This study will give our listed companies to avoid hostile takeover have practical inspiration.