Publication Date
4-27-2007
Abstract
This study examines the use of poison pill plans in the banking industry. This research demonstrates that the increasing number of banks adopting a poison pill plan is related to increasing market concentration. There are two hypotheses explaining the intent of these adoptions: (l) Managerial Entrenchment and (2) Shareholder Interest. This study specifically examined these hypotheses in the banking industry between 1986 and 2003. Results indicated that comparison banks not adopting a poison pill had a significant improvement in ROE the year after their peers adopted a poison pill. Additional results of this research contradict the popularly held belief that a poison pill plan provides a significant improvement in the probability of survival.
Disciplines
Business Administration, Management, and Operations
Recommended Citation
Hooper '07, Zachary, "An Empirical Investigation of Poison Pill Use in the Banking Industry" (2007). Honors Projects. 3.
https://digitalcommons.iwu.edu/busadmin_honproj/3