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Corporate Restructuring through Spin-offs: Evidence on Shareholder Wealth from Western Europe

Gaedt, Nils Johannes and Klein, Tobias LU (2016) BUSN89 20161
Department of Business Administration
Abstract
This paper investigates and quantifies shareholder wealth effects arising through spin-off announcements in Western Europe. Building on existing research the study seeks to add recent results and to further investigate whether the effect of spin-off announcements on shareholder value has altered in current times. In order to find out to what extent abnormal returns around the announcement date for the parent firm exist, an event study is implemented. Furthermore, the results are tested in a cross sectional regression using OLS. The results reveal that there is a positive effect on shareholder value in the short-run. Moreover, a positive relationship between abnormal returns and industry focus as well as leverage is found. Size and age are... (More)
This paper investigates and quantifies shareholder wealth effects arising through spin-off announcements in Western Europe. Building on existing research the study seeks to add recent results and to further investigate whether the effect of spin-off announcements on shareholder value has altered in current times. In order to find out to what extent abnormal returns around the announcement date for the parent firm exist, an event study is implemented. Furthermore, the results are tested in a cross sectional regression using OLS. The results reveal that there is a positive effect on shareholder value in the short-run. Moreover, a positive relationship between abnormal returns and industry focus as well as leverage is found. Size and age are negatively correlated with abnormal returns. (Less)
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author
Gaedt, Nils Johannes and Klein, Tobias LU
supervisor
organization
course
BUSN89 20161
year
type
H1 - Master's Degree (One Year)
subject
keywords
Corporate Restructuring Spin-offs Shareholder Wealth Event Study Regression Analysis
language
English
id
8885669
date added to LUP
2016-08-22 12:46:17
date last changed
2016-08-22 12:46:17
@misc{8885669,
  abstract     = {This paper investigates and quantifies shareholder wealth effects arising through spin-off announcements in Western Europe. Building on existing research the study seeks to add recent results and to further investigate whether the effect of spin-off announcements on shareholder value has altered in current times. In order to find out to what extent abnormal returns around the announcement date for the parent firm exist, an event study is implemented. Furthermore, the results are tested in a cross sectional regression using OLS. The results reveal that there is a positive effect on shareholder value in the short-run. Moreover, a positive relationship between abnormal returns and industry focus as well as leverage is found. Size and age are negatively correlated with abnormal returns.},
  author       = {Gaedt, Nils Johannes and Klein, Tobias},
  keyword      = {Corporate Restructuring Spin-offs Shareholder Wealth Event Study Regression Analysis},
  language     = {eng},
  note         = {Student Paper},
  title        = {Corporate Restructuring through Spin-offs: Evidence on Shareholder Wealth from Western Europe},
  year         = {2016},
}