Coakley, J and Thomas, H and Wang, H (2008) The short-run wealth effects of foreign divestitures by UK firms. Applied Financial Economics, 18 (3). pp. 173-184. DOI https://doi.org/10.1080/09603100601018831
Coakley, J and Thomas, H and Wang, H (2008) The short-run wealth effects of foreign divestitures by UK firms. Applied Financial Economics, 18 (3). pp. 173-184. DOI https://doi.org/10.1080/09603100601018831
Coakley, J and Thomas, H and Wang, H (2008) The short-run wealth effects of foreign divestitures by UK firms. Applied Financial Economics, 18 (3). pp. 173-184. DOI https://doi.org/10.1080/09603100601018831
Abstract
We analyse a unique sample of 165 foreign divestitures by UK firms 1986?1995. These divestitures lead to significantly positive shareholder wealth effects of 4.8% over the 10 days before and after the announcement date. They are several times larger than the corresponding wealth effects reported for US firms and are robust to a number of factors such as size, market-to-book ratio, GARCH effects, thin trading effects and cross-sectional dependence. The wealth gains are associated with an increase in geographical focus towards Anglo-Saxon corporate governance regimes rather than simply in industrial focus as in the case of domestic divestitures. They are also related to poor pre-divestiture stock performance which is consistent with the financing explanation to combat agency and financial distress problems.
Item Type: | Article |
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Subjects: | H Social Sciences > HG Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 18 Dec 2012 11:32 |
Last Modified: | 16 May 2024 17:54 |
URI: | http://repository.essex.ac.uk/id/eprint/4772 |