The article by Michael D. Frakes examines the impact of classified boards on firm value, a potent takeover defense mechanism in U.S. firms. The author addresses the ambiguity in economic theory regarding the effect of classified boards on firm value and employs robust empirical methods to resolve this issue. Using the instrumental variables model developed by Hausman and Taylor, Frakes finds a statistically significant negative association between classified board status and firm value. This finding is confirmed using a variation of the difference-in-difference-in-difference (DDD) model. However, quantile regression results suggest that the negative association may be concentrated at the upper tail of the firm value distribution, indicating that classified boards may have positive effects on firm value in certain circumstances. The article also reviews prior empirical literature on the link between corporate governance and firm value, highlighting the limitations of index approaches and the need for more structural econometric models.The article by Michael D. Frakes examines the impact of classified boards on firm value, a potent takeover defense mechanism in U.S. firms. The author addresses the ambiguity in economic theory regarding the effect of classified boards on firm value and employs robust empirical methods to resolve this issue. Using the instrumental variables model developed by Hausman and Taylor, Frakes finds a statistically significant negative association between classified board status and firm value. This finding is confirmed using a variation of the difference-in-difference-in-difference (DDD) model. However, quantile regression results suggest that the negative association may be concentrated at the upper tail of the firm value distribution, indicating that classified boards may have positive effects on firm value in certain circumstances. The article also reviews prior empirical literature on the link between corporate governance and firm value, highlighting the limitations of index approaches and the need for more structural econometric models.