Bridge over ocean
1 November 1992 Financial Analysts Journal Volume 48, Issue 6

Effects of the Antitakeover Provisions of Pennsylvania Act 36: A Survey of Empirical Studies

  1. M. Wayne Marr

Pennsylvania Act 36 restricts changes in corporate control and limits share holders' rights. The act thus harms shareholders in Pennsylvania-incorporated firms. Empirical studies of the effects of the act agree that it has cost shareholders in Pennsylvania firms some 4% to 9% of firm value, or about $4 billion.

Firms incorporated in Pennsylvania may elect not to be covered by provisions of Act 36 Shareholders in firms that opted out of the act have experienced positive abnormal returns in the range of 0.5% to 2.5% of firm value.

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