Veld, C. and Veld-Merkoulova, Y. (2009) Value creation through spin-offs: a review of the empirical evidence. International Journal of Management Reviews, 11(4), pp. 407-420. (doi: 10.1111/j.1468-2370.2008.00243.x)
Full text not currently available from Enlighten.
Abstract
This paper reviews the literature on the factors that influence the wealth effects associated with the announcements of corporate spin-offs (also known as demergers). Meta-analysis is used to summarize the findings of 26 event studies on spin-off announcements. A significantly positive average abnormal return of 3.02% is found during the event window. Returns are higher for larger spin-offs, for divestments that are tax or regulatory friendly and for spin-offs that lead to an improvement of industrial focus. It is also found that spin-offs that are later completed are associated with lower abnormal returns than non-completed spin-offs. The second part of the paper overviews studies on the long-run stock price performance of spin-offs. Even though early studies find a long-run superior performance, this effect is no longer found in later studies that use more refined statistical tests.
Item Type: | Articles |
---|---|
Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Veld, Professor Chris and Veld-Merkoulova, Professor Yulia |
Authors: | Veld, C., and Veld-Merkoulova, Y. |
Subjects: | H Social Sciences > HG Finance H Social Sciences > HB Economic Theory |
College/School: | College of Social Sciences > Adam Smith Business School > Accounting and Finance |
Journal Name: | International Journal of Management Reviews |
ISSN: | 1460-8545 |
ISSN (Online): | 1468-2370 |
Published Online: | 28 August 2008 |
University Staff: Request a correction | Enlighten Editors: Update this record