27 Pages Posted: 4 Jun 2010
We analyse the market reaction to divestiture decisions and determine the impact of corporate governance practices. We find the market reaction is significant and can be determined using internal governance mechanisms. We evaluate the determinants of the decision to sell using a control sample of firms displaying characteristics often associated with divestitures indicating that these firms may face the same incentives to divest but elect not to restructure in this manner. Our results suggest that a combination of strong internal and external governance may force managers to act in a manner that is incompatible with their personal desires.
Suggested Citation: Suggested Citation
Owen, Sian A. and Shi, Liting and Yawson, Alfred, Divestitures, Wealth Effects and Corporate Governance. Accounting & Finance, Vol. 50, No. 2, pp. 389-415, June 2010. Available at SSRN: https://ssrn.com/abstract=1615756 or http://dx.doi.org/10.1111/j.1467-629X.2009.00332.x
This is a Wiley-Blackwell Publishing paper. Wiley-Blackwell Publishing charges $38.00 .
File name: acfi.
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.