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Type: Journal article
Title: Analysing the wealth effect of UK divestitures: An examination of domestic and international sales
Author: Cao, J.
Owen, S.
Yawson, A.
Citation: Research in International Business and Finance, 2008; 22(1):68-84
Publisher: J A I Press Inc
Issue Date: 2008
ISSN: 0275-5319
Statement of
Jack Cao, Sian Owen, Alfred Yawson
Abstract: Here we analyse divestiture announcement effects for UK multinational corporations accounting for the location of the unit sold. We find some bias in market reactions with larger abnormal returns for UK divestitures when compared to overseas sales. US sales generate larger returns than those in Continental Europe or the Asia-Pacific region. We analyse the determinants of abnormal returns using accounting and transaction data, supplemented with country specific data for overseas sales. Abnormal returns for UK sales are explained by financial characteristics of the selling firm but the size of the transaction relative to the firm is the most significant factor in overseas divestitures. © 2007 Elsevier B.V. All rights reserved.
Keywords: Divestiture
Multinational corporations
Abnormal returns
Announcement effect
Rights: © 2007 Elsevier B.V. All rights reserved.
DOI: 10.1016/j.ribaf.2006.12.005
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