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The Announcement Effects of China’s Listed Companies’ Divestitures
Liangzhong Luo
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DOI:10.17265/1537-1506/2005.05.011
East China University of Politics and Law
By utilizing the mean adjusted return model of the event study, this paper examines the announcement-period abnormal returns of a sample of 44 divestitures of China’s listing companies completed during 1998-2002. The findings are that sample firms have positive cumulative average abnormal returns in the event windows of [-1, +1] and [0, +7], and that, as for any individual firm, almost half of the sample firms get positive cumulative abnormal returns in a narrow event window. Those results show that the corporate divestitures of China are able to increase shareholders’ wealth in a short period around the announcement date.
asset restructuring divestiture listed company