An Examination of Corporate Spin-Offs on Company Performance and Shareholder Value
The aim of this study is to examine the implications of corporate spin-offs on company performance and shareholder value. The study uses both event study and accounting-based study methodologies to assess the stock price response of parent companies to the announcement of spin-offs, and to analys...
| Main Author: | |
|---|---|
| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2015
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| Online Access: | https://eprints.nottingham.ac.uk/30160/ |
| _version_ | 1848793933594755072 |
|---|---|
| author | Scicluna, Karl |
| author_facet | Scicluna, Karl |
| author_sort | Scicluna, Karl |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | The aim of this study is to examine the implications of corporate spin-offs on
company performance and shareholder value. The study uses both event study
and accounting-based study methodologies to assess the stock price response of
parent companies to the announcement of spin-offs, and to analyse the long-run
operating performance of spin-offs for both parent and subsidiary companies.
The study focuses on UK and US firms between 2001 and 2011.
Evidence collected from the event study and accounting-based study
methodologies enable the study to differentiate between the short-term and
long-term wealth effects of corporate spin-offs. Findings from the event study
reveal and confirm that corporate spin-off announcements result in abnormal
stock market returns. A mean cumulative abnormal return of 2.71% was
reported during the estimation window. Furthermore, the findings of this study
endorses the theory that cross-industry spin-off announcements result in higher
abnormal stock market returns than own-industry spin-off announcements.
Findings from the accounting-based study reveal that the wealth effects
associated with corporate spin-offs do not persist in the long-run to the same
degree as revealed during the spin-off announcements. There is also evidence to
suggest that the relative size of the divestiture, the leverage situation of the
parent company and the capital expenditure of the parent company, may have a
significant influence on the performance of spin-offs. |
| first_indexed | 2025-11-14T19:08:10Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-30160 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T19:08:10Z |
| publishDate | 2015 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-301602017-10-19T14:52:18Z https://eprints.nottingham.ac.uk/30160/ An Examination of Corporate Spin-Offs on Company Performance and Shareholder Value Scicluna, Karl The aim of this study is to examine the implications of corporate spin-offs on company performance and shareholder value. The study uses both event study and accounting-based study methodologies to assess the stock price response of parent companies to the announcement of spin-offs, and to analyse the long-run operating performance of spin-offs for both parent and subsidiary companies. The study focuses on UK and US firms between 2001 and 2011. Evidence collected from the event study and accounting-based study methodologies enable the study to differentiate between the short-term and long-term wealth effects of corporate spin-offs. Findings from the event study reveal and confirm that corporate spin-off announcements result in abnormal stock market returns. A mean cumulative abnormal return of 2.71% was reported during the estimation window. Furthermore, the findings of this study endorses the theory that cross-industry spin-off announcements result in higher abnormal stock market returns than own-industry spin-off announcements. Findings from the accounting-based study reveal that the wealth effects associated with corporate spin-offs do not persist in the long-run to the same degree as revealed during the spin-off announcements. There is also evidence to suggest that the relative size of the divestiture, the leverage situation of the parent company and the capital expenditure of the parent company, may have a significant influence on the performance of spin-offs. 2015-09-17 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/30160/1/Karl%20Scicluna%20-%20THESIS%20PDF.pdf Scicluna, Karl (2015) An Examination of Corporate Spin-Offs on Company Performance and Shareholder Value. [Dissertation (University of Nottingham only)] |
| spellingShingle | Scicluna, Karl An Examination of Corporate Spin-Offs on Company Performance and Shareholder Value |
| title | An Examination of Corporate Spin-Offs on
Company Performance and Shareholder Value |
| title_full | An Examination of Corporate Spin-Offs on
Company Performance and Shareholder Value |
| title_fullStr | An Examination of Corporate Spin-Offs on
Company Performance and Shareholder Value |
| title_full_unstemmed | An Examination of Corporate Spin-Offs on
Company Performance and Shareholder Value |
| title_short | An Examination of Corporate Spin-Offs on
Company Performance and Shareholder Value |
| title_sort | examination of corporate spin-offs on
company performance and shareholder value |
| url | https://eprints.nottingham.ac.uk/30160/ |