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Characteristics of Firms Going Private in the Malaysian Stock Exchange

Author

Listed:
  • Pei Ling Lee

    () (Faculty of Business and Law, Multimedia University, Malaysia)

  • Roy Wye Leong Khong

    () (Nottingham University Business School, University of Nottingham, Malaysia)

  • Suganthi Ramasamy

    () (Faculty of Business and Law, Multimedia University, Malaysia)

Abstract

The study empirically investigates the financial characteristics that discriminate firms that went private and firms that remain publicly traded. Based on the results of logit and probit model, companies that reverted to the private domain are characterized as having higher cash balance, higher degree of undervaluation, higher operating profit margin, lower dividend payout rate, and lower free float compared to public counterparts. The classification accuracy rates for in-sample and holdout sample are 69.17% and 65.38% respectively.

Suggested Citation

  • Pei Ling Lee & Roy Wye Leong Khong & Suganthi Ramasamy, 2010. "Characteristics of Firms Going Private in the Malaysian Stock Exchange," Economics Bulletin, AccessEcon, vol. 30(2), pages 1307-1319.
  • Handle: RePEc:ebl:ecbull:eb-09-00775
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Going Private; Public-to-Private Transaction; Stock Market; Target Prediction; Firm Characteristics;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G1 - Financial Economics - - General Financial Markets

    Statistics

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