Publication Type
Journal Article
Version
submittedVersion
Publication Date
3-2005
Abstract
This paper discusses the different forms of corporate divestitures, the motives for this corporate activity, and the empirical findings about their economic outcomes. A sample of corporate divestitures is also used to identify the main motivations in the Singapore context. We conclude that divestitures are carried out to achieve operational efficiency and gain incremental profitability and liquidity. Using share price data around the event-dates, we show that announcements of divestitures generally lead to significant increases in the returns of the parent company. The positive abnormal returns are related to the relative size of the divestitures and the computed accounting gains. Overall, corporate divestiture is a value-increasing activity for Singapore companies.
Keywords
Spinoffs, divestitures, Singapore
Discipline
Asian Studies | Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance; Applied Microeconomics
Publication
Journal of Restructuring Finance
Volume
2
Issue
1
First Page
69
Last Page
79
ISSN
0219-869X
Identifier
10.1142/S0219869X05000191
Publisher
World Scientific
Citation
KOH, Francis; KOH, Winston T. H.; and KOH, Benedict S. K..
Corporate Divestitures and Spinoffs in Singapore. (2005). Journal of Restructuring Finance. 2, (1), 69-79.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/2606
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1142/S0219869X05000191
Included in
Asian Studies Commons, Finance and Financial Management Commons, Portfolio and Security Analysis Commons