Title

Valuation effects of foreign divestitures

Abstract

This study assesses announcement period valuation effects of foreign divestitures and explains why these valuation effects vary among firms. Significant positive valuation effects are observed. The valuation effects of foreign divestitures are positive and are similar in magnitude to those of a matched control group of domestic divestitures. Results of a cross-sectional analysis suggest that valuation effects are positively related to the relative size of the divested unit. Valuation effects are more favorable when divestitures are for strategic reorganization purposes and/or to raise cash, and valuation effects are more favorable for foreign divestitures in industrialized host countries. Several important managerial implications emerge from the results of this study. © 1998 John Wiley & Sons, Ltd.

Publication Date

1-1-1998

Publication Title

Managerial and Decision Economics

Volume

19

Issue

2

Number of Pages

71-79

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1002/(SICI)1099-1468(199803)19:2<71::AID-MDE866>3.0.CO;2-#

Socpus ID

84989254512 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/84989254512

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