Two Essays on the Corporate Restructuring.
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文摘
In the first essay titled "Divestitures and Acquisition Probability",I examine the relationship between a firms divestiture activities and the likelihood that the firm will become an acquisition target. Using a logit model comparing a sample of target firms matched with a sample of non-target firms from 1986 to 2010,we find that a firm is 27 percent more likely to be acquired within three years of a divestiture activity than if there was no previous divestiture,and the effect is stronger for firms with fewer numbers of segments. Our finding is robust to modifications of control variables,to managerial entrenchment,as well as to alternative diagnoses. Consistent with the literature,we find the market reacts positively to a divestiture announcement. However,cross-sectionally we find the market reaction is positively related to whether or not the divesting firm adopts a golden parachute feature and negatively on the firms number of segments which is related to the probability of future acquisition. In the second essay titled "The Choice of Divestiture and Long-run Performance: Asset Sell-off versus Equity Carve-out," I examine the post-divestiture long-run performance of two different choices of corporate divestiture,asset sell-offs versus equity carve-outs,and find that the choice of divestiture method has important implications for post-divestiture long-run performance. My findings show that the sell-off parents long-run abnormal returns are significantly higher than those of the carve-out parents. I also find evidence that the long-term abnormal performance improves with a reduction in the diversification discount. The effect of the diversification discount is weaker for divesting parents with higher levels of R&D. My results further show that a firms pre-divestiture number of segments and level of asymmetric information are positively related to the probability of an asset sell-off.