THE IMPACT OF ANTITAKEOVER PROVISIONS ON CORPORATE SOCIAL PERFORMANCE: CORPORATE DEFENSE STRATEGIES AND FIRM SUSTAINABILITY

Through both theoretical exploration and empirical analysis, this Thesis aims to provide insights into the governance arrangements that enable or hinder firms in achieving positive social and financial outcomes, with a specific focus on antitakeover provisions. The study begins by tracing the evolution of the CSR concept into its measurable component, CSP, which evaluates a firm's practical commitments to sustainability and ethical practices. This Thesis then dives into the literature linking corporate governance, CSP and firm performance, building the foundation for empirically testing the effects of antitakeover provisions on Corporate Social Performance. By analyzing a panel dataset of publicly traded firms, the study explores whether ATPs, designed to deter hostile takeovers, influence corporate commitment to sustainable and ethical practices. Using a fixed effects regression approach and controlling for governance and firm characteristics, the research examines how ATPs affect CSP scores along environmental and social dimensions. Results suggest that the stability provided by antitakeover defenses can have a positive effect on CSP, as managers can focus on long-term oriented activities without fearing immediate displacement. However, this effect shows "diminishing returns" as increasing ATPs over a certain threshold excessively increases managerial power, reducing accountability. Overall, the findings provide insights into those corporate governance mechanisms that potentially influence firms' sustainability strategies, and contribute to the ongoing debate on the role of ATPs in fostering long-term stakeholder value. These insights have practical implications for policymakers, investors, and corporate leaders seeking to design governance frameworks that balance managerial stability with accountability, ultimately maximizing shareholder value and stakeholder utility.

Through both theoretical exploration and empirical analysis, this Thesis aims to provide insights into the governance arrangements that enable or hinder firms in achieving positive social and financial outcomes, with a specific focus on antitakeover provisions. The study begins by tracing the evolution of the CSR concept into its measurable component, CSP, which evaluates a firm's practical commitments to sustainability and ethical practices. This Thesis then dives into the literature linking corporate governance, CSP and firm performance, building the foundation for an empirical investigation the effects of antitakeover provisions on Corporate Social Performance. By analyzing a panel dataset of publicly traded firms, the study explores whether ATPs, designed to deter hostile takeovers, influence corporate commitment to sustainable and ethical practices. Using a fixed effects regression approach and controlling for governance and firm characteristics, the research examines how ATPs affect CSP scores along environmental and social dimensions. Results suggest that the stability provided by antitakeover defenses can have a positive effect on CSP, as managers can focus on long-term oriented activities without fearing immediate displacement. However, this effect shows "diminishing returns" as increasing the number of ATPs over a certain threshold excessively increases managerial power, reducing accountability. Overall, the findings provide insights into those corporate governance mechanisms that potentially influence firms' sustainability strategies, and contribute to the ongoing debate on the role of ATPs in fostering long-term stakeholder value. These insights have practical implications for policymakers, investors, and corporate leaders seeking to design governance frameworks that balance managerial stability with accountability, ultimately maximizing shareholder value and stakeholder utility.