Firm performance and focus: long-run stock market performance following spinoffs

• 成果类型: Article
• 署名作者: Desai, H; Jain, PC
• 署名单位: Southern Methodist University; Tulane University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(99)00032-X
• 发表日期: 1999
• 页码: 75-101
• 关键词: spinoff; divestiture; focus; long-run performance; operating performance

摘要

We examine whether an increase in focus is an explanation for the stock market gains associated with spinoffs. For a sample of 155 spinoffs between the years 1975 and 1991, we find that the announcement period as well the long-run abnormal returns for the focus-increasing spinoffs are significantly larger than the corresponding abnormal returns for the non-focus-increasing spinoffs. The results for the change in operating performance are consistent with those for the stock market performance. Cross-sectionally, the stock market performance as well as the operating performance;are positively associated with change in focus. An analysis of the non-focus-increasing spinoffs shows that the firms are likely to undertake these spinoffs to separate underperforming subsidiaries from the parents. (C) 1999 Elsevier Science S.A. All rights reserved.