Heterogeneous impacts of staggered boards by ownership concentration

Previous studies provide evidence of a negative relationship between staggered boards and firm value. However, these studies use specifications that do not allow for the heterogeneous impacts of staggered boards for different subsets of firms as predicted by theory. This paper presents more detailed hypotheses regarding how the impact of staggered boards should vary with the probability of takeover. Empirical findings using outside ownership concentration as a proxy for that probability confirm predictions that while for most firms staggered boards do have a negative impact on firm value, for a substantial and identifiable subset of firms staggered boards appear benign.