Publication Type:

Journal Article

Source:

Corporate Ownership and Control, Virtus Interpress, Volume 13, Number 1CONT2, p.292-295 (2015)

URL:

https://www.scopus.com/inward/record.uri?eid=2-s2.0-84941127821&partnerID=40&md5=1a15c6d32edff6cf1e009fa19a6a5ac5

Abstract:

In corporate governance, spinoff decision is made either to focus on a specific area of business or to get rid of businesses with low profit margin. Separation of some management assets for a better management of existing assets referred to as a spin off. The spun off or subsidiary company is formed by issuing new shares to the existing shareholders while losing some original or parent company shares. By doing so, shareholders’ value might be lost. With a sample of 65 companies spun off since 2009, this paper analyse the stock price movements of the spun off and the parent company and productivity in terms of turnover of the spun off company. From the analysis, there has been an increase in both productivity and stock price. This paper also emphasizes how corporate governance in spin off decisions can protect shareholders’ value. © 2015, Virtus interpress.All rights reserved.

Notes:

cited By 0

Cite this Research Publication

Ma Manojj and M.b Sahay, “Productivity and stock price reaction to spin-off decision”, Corporate Ownership and Control, vol. 13, pp. 292-295, 2015.