Essays on the Economic Consequences of Legal Frictions in the Market for Corporate Control

Abstract

The economic consequences of legal and regulatory frictions are important for policymakers, practitioners, and academics to understand, due to the critical role the legal and regulatory environment plays in the development of capital markets and thus resource allocation. This thesis, comprised of two essays, explores the economic consequences of landmark court rulings that affect the US market for corporate control—a market which represents over $1 trillion in annual transaction value—shedding new light on how legal frictions impact target managers’ disclosure decisions in mergers (in Essay 1) and on how legal frictions affect merger activity (in Essay 2).