What explains the market reaction to divestiture: Announcements?

Lal, JR; Nguyen, P; Rahman, N

What explains the market reaction to divestiture: Announcements?

Lal, JR Nguyen, P Rahman, N

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Publication Type:: Journal Article
Citation:: JASSA, 2013, 2013 (1), pp. 28 - 31
Issue Date:: 2013-01-01

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Field	Value	Language
dc.contributor.author	Lal, JR	en_US
dc.contributor.author	Nguyen, P	en_US
dc.contributor.author	Rahman, N https://orcid.org/0000-0002-8251-7796	en_US
dc.date.issued	2013-01-01	en_US
dc.identifier.citation	JASSA, 2013, 2013 (1), pp. 28 - 31	en_US
dc.identifier.issn	0313-5934	en_US
dc.identifier.uri	http://hdl.handle.net/10453/26403
dc.description.abstract	We show that announcements of divestitures by Australian firms induce a significant increase in shareholder value. While the extent of the market reaction depends on the relative size of the divested asset, high leverage and poor operating performance do not appear to generate higher returns. The application of quantile regressions reveals a high degree of asymmetry in the market reaction. We also find that increased focus through the divestiture of non-core assets is no longer associated with higher returns.	en_US
dc.relation.ispartof	JASSA	en_US
dc.title	What explains the market reaction to divestiture: Announcements?	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	2013	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1801 Law	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
pubs.organisational-group	/University of Technology Sydney/Strength - CCG - Centre for Corporate Governance
utslib.copyright.status	open_access
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	2013	en_US

Abstract:

We show that announcements of divestitures by Australian firms induce a significant increase in shareholder value. While the extent of the market reaction depends on the relative size of the divested asset, high leverage and poor operating performance do not appear to generate higher returns. The application of quantile regressions reveals a high degree of asymmetry in the market reaction. We also find that increased focus through the divestiture of non-core assets is no longer associated with higher returns.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/26403