Do Spinoffs Create Value in Hong Kong?
There is a broad consensus in the literature that spinoffs tend to create value for shareholders and exhibit positive long-run excess returns. However, most of the prior studies are confined to the US and the European cases. The spinoff problems in Hong Kong are surprisingly under-studied despite i...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | en |
| Published: |
Emerald Group Publishing Limited
2006
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/16678/1/Terence.pdf http://ir.unimas.my/id/eprint/16678/ http://www.emeraldinsight.com/doi/abs/10.1108/15587890980000416 |
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| Summary: | There is a broad consensus in the literature that spinoffs tend to create value for shareholders and exhibit positive long-run excess returns. However, most of the prior studies are confined to the US and the European cases. The spinoff problems in Hong Kong
are surprisingly under-studied despite its important role as a global center of capital formation. In this paper, we find that there is a short-run value creation for the Hong Kong spinoffs. However, the financial health of the spinoff companies, measured by various financial ratios, tends to deteriorate in the long-run. In general, Hong Kong spinoffs generate negative returns to investors. |
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