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Stock market valuation of joint venture sell-offs

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  • Pierre-Xavier Meschi

    ([1] Université de la Méditerranée (Aix-Marseille II), France [2] Euromed Marseille – Ecole de Management, Marseille Cedex, France)

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    Abstract

    This article examines the stock market performance implications of joint venture (JV) partner sell-offs using a resource-based view and an event study methodology. More specifically, it proposes hypotheses putting into evidence the stock market valuation of different reasons for JV sell-offs (refocusing of a business, debt reduction, and JV failure). Abnormal returns (ARs) from JV sell-offs are estimated for a sample of 151 European selling partners. First, the results show that stock market reactions observed around the date of announcement are significant and positive. This finding is consistent with that of finance research literature on stock market reactions to ordinary asset sales. This leads us to discount the idea that stock markets place a specific valuation on JV sell-offs. Second, the results indicate that the reasons for JV sell-offs are a determinant of ARs of selling partners. Journal of International Business Studies (2005) 36, 688–700. doi:10.1057/palgrave.jibs.8400162

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    Bibliographic Info

    Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

    Volume (Year): 36 (2005)
    Issue (Month): 6 (November)
    Pages: 688-700

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    Handle: RePEc:pal:jintbs:v:36:y:2005:i:6:p:688-700

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    Web page: http://www.palgrave-journals.com/

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    Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
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    Cited by:
    1. Kolloge, Konstantin, 2009. "Die Messung des Kooperationserfolges in der empirischen Forschung: Ergebnisse einer Literaturstudie," Arbeitspapiere 76, Westfälsche Wilhelms-Universität Münster (WWU), Institut für Genossenschaftswesen.

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