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Corporate restructuring, financial deregulation, and firm value: Evidence from Japanese “spin-ins”

  • Choi, Yoon K.
  • Han, Seung Hun
Registered author(s):

    This paper examines the impact on firm value from the restructuring process of the keiretsu system due to Japan's deregulation. We focus on unique internal restructuring transactions called “spin-ins” that are triggered by the Amendment of the Commercial Code in 2001. We show that significant positive abnormal returns exist around the announcement of the spin-ins. These announcement returns have a positive relation to keiretsu affiliation and bank financing. Also, we find that Japanese spin-ins result in a significant improvement in investment-Q sensitivity, especially for keiretsu firms. Our results support the argument that the keiretsu system has transformed itself into a more efficient organization through the recent deregulation in financial markets.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0927538X12000807
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    Article provided by Elsevier in its journal Pacific-Basin Finance Journal.

    Volume (Year): 22 (2013)
    Issue (Month): C ()
    Pages: 1-13

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    Handle: RePEc:eee:pacfin:v:22:y:2013:i:c:p:1-13
    DOI: 10.1016/j.pacfin.2012.11.001
    Contact details of provider: Web page: http://www.elsevier.com/locate/pacfin

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