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|Appears in Collections:||Accounting and Finance Journal Articles|
|Peer Review Status:||Refereed|
|Title:||Value creation through spin-offs: A review of the empirical evidence|
Veld-Merkoulova, Yulia V
long-run excess returns
|Citation:||Veld C & Veld-Merkoulova YV (2009) Value creation through spin-offs: A review of the empirical evidence. International Journal of Management Reviews, 11 (4), pp. 407-420. https://doi.org/10.1111/j.1468-2370.2008.00243.x|
|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). We use meta-analysis to summarize the findings of 26 event studies on spin-off announcements. We find a significantly positive average abnormal return of 3.02% 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. We also find that spin-offs that are later completed are associated with lower abnormal returns than non-completed spin-offs. In the second part of the paper we overview 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.|
|Rights:||Published in the International Journal of Management Reviews. Copyright: Wiley-Blackwell / British Academy of Management.; The definitive version is available at www3.interscience.wiley.com; Rights as indicated by the Exclusive Licence Form: http://www.blackwellpublishing.com/pdf/IJMR_ELF.pdf|
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|value-creation-through-spin-offs-a-review-final.pdf||Fulltext - Accepted Version||84.54 kB||Adobe PDF||View/Open|
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