Anti-takeover Provisions And Corporate Innovation

Recently,hostile takeover activities characterized by the pledge of tenders by insurance companies in China's capital market have occurred frequently.Hostile takeovers are usually accompanied by the transfer of control.On the one hand,the pressure of acquisition can make up for the shortcomings of the company's internal governance mechanism.The supervision and disciplinary role from the control market can encourage the management and decision makers to maximize the value of the company,alleviating the two.On the other hand,because the transfer of control rights usually affects the company's stable operation ability,especially when the pressure of acquisition is reached to a certain extent,corporate decision makers will invest heavily in short-term projects and reduce long-term projects for their own job security.With the investment of innovation,the long-term value of the enterprise will be damaged,so the influence of the control market on the enterprise has two sides.The insurance company frequently advertises listed companies in the capital market,and has the characteristics of "leveraged buyouts"-the purpose of the acquirer is not to integrate industry assets,occupy market share,or improve the operating level of poorly run companies.Profit,etc.,but through the split sale of listed company assets to quickly obtain investment income,the risk is large and not conducive to the development of the enterprise.In order to reduce the risk of hostile takeovers,listed companies adopt a series of anti-acquisition measures,and setting anti-acquisition clauses in the company's articles of association is a relatively common pre-acquisition measure.Due to the two-sided nature of hostile takeovers,the impact of anti-takeover terms on the operations and performance of listed companies is uncertain.This paper selects enterprise technology innovation as the starting point and studies the impact of anti-acquisition clauses on the operation and performance of listed companies.Since the impact of anti-acquisition clauses on innovative and non-innovative companies is quite different,and it is difficult to collect data on the anti-acquisition terms of all listed companies,this paper selects four industries with large investment in 2007-2016(C35,C36,C38).The listed company of C39)is a research sample to study the impact of anti-acquisition clauses on R&D investment.The study found that because innovation projects have long duration,high risk and uncertainty,and because information asymmetry investors tend to underestimate corporate value,decision makers will reduce R&D investment for the safety of control.Setting anti-acquisition clauses in the company's articles of association can reduce the pressure on acquisitions from the control market,provide a long-term and stable internal and external environment for the company,help decision-makers overcome the short-sighted behavior and avoid worries,and improve R&D in order to improve the long-term value of the company.Investing,so innovative companies with anti-acquisition terms,R&D investment levels are higher.There is a mediating effect between the anti-acquisition clause,R&D investment and corporate value,indicating that the promotion effect of the anti-acquisition clause on R&D investment is ultimately reflected in the growth of corporate value.Secondly,because the anti-acquisition clause also has the effect of aggravating the agency problem,enterprises with serious agency problems and scattered equity may become targets of hostile takeovers due to the dispersal of equity and mismanagement.Such enterprises tend to avoid control from setting up anti-takeover clauses.The supervision and disciplinary role of the market facilitates short-selling.At this time,there is a negative correlation between the anti-acquisition clause and the innovation investment of the enterprise.The anti-acquisition clause is expressed as“Trench Effect".In addition,in the case of weak competition in the product market,the results of innovation can be more enjoyed by enterprises,and the motivation for independent innovation of enterprises is stronger.The anti-acquisition clause has a stronger positive promotion effect on R&D investment.Finally,relative to state-owned enterprises,the anti-acquisition clauses of non-state-owned enterprises have also contributed to the promotion of R&D investment.