Do Malaysian Focus-Increasing Spin-Off Firms Underperform?
AbstractThis paper investigates whether increased corporate focus surrounding a spin-off is associated with abnormal short-run and long-run share return performance from January 1980 to April 2011. By looking at the share return performance of both focus-increasing and non-focus-increasing parent firms, we find evidence against the claims of the focus-increasing hypothesis. Our results show that focus-increasing parent firms significantly underperformed when compared to their counterparts in the non-focus-increasing sub-sample during the few days surrounding the announcement date, even after adjusting for firm size. We also observe that spin-offs by the focus-increasing entities fail to demonstrate abnormal performance in the long-run period of three years.
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Bibliographic InfoArticle provided by Penerbit Universiti Sains Malaysia in its journal Asian Academy of Management Journal of Accounting and Finance.
Volume (Year): 8 (2012)
Issue (Month): 1 ()
spin-offs; share returns performance; market efficiency; focus;
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