The Market for Corporate Control.The Theory and the Empirical Evidence

Seminar paper from the year 2012 in the subject Business economics - Investment and Finance grade: 13 Otto Beisheim School of Management Vallendar (Chair for Corporate Finance) course: Seminar on Recent Developments in Corporate Governance language: English abstract: The market for corporate control often referred to as the takeover market is subject to scientific research since many years. This paper starts with Manne's (1965) initial essay on the topic introduce the theory of the market for corporate control. Therefore it will begin with a definition of the terms corporate control and the market for corporate control. Following this it will explain the possibilities of taking over the control of a corporation. Subsequently it will argue why the market for corporate control is of great importance. Afterwards a synopsis on the current empirical evidence of its efficiency follows. Finally the author takes a look on the welfare effects of the market for corporate control before concluding on its applicability and having a look on solutions to correct the imperfections of the model.