Announcement wealth effects of corporate spin offs

 
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2015 (EN)

Announcement wealth effects of corporate spin offs

Sismanidou ,Maria
Koulikidou, Kleopatra

This paper is going to analyze the announcement wealth effects for a sample of 250 spin offs, that took place in Western Europe and U.S.A., between January 2000 and December 2009. Using the event study methodology, we measure both the short-term and long-term reaction of firms announcing a spin off. The results reveal a positive and statistically significant cumulative abnormal return over a 3-day interval (-1, +1) of 6.18%. Looking at the industrial focus of spin offs, we find a cumulative abnormal return of 2.10% for the spin offs that increase their industrial focus and 4.17% for the non-focus increasing firms. Moreover, the results from the regression analysis show Return on Assets and EBITDA/Total Assets ratios are the main driving forces behind the excess returns of spin offs. Finally, we test the long-term performance of sample firms, parents and subsidiaries using financial ratios and compare this performance with a sample of matching firms.

masterThesis

Dissertations, Academic
abnormal returns
long-term performance
Subsidiary corporations
Subsidiary corporations--Valuation
event study
Spin offs


English

2015-04-08
2015-04-08T12:09:26Z
2015-09-27T06:05:09Z


School of Economics, Business Administration and Legal Studies, MSc in Banking and Finance
ihu




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