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What do we know about delistings? A survey of the literature

Author

Listed:
  • Constant Djama
  • Isabelle Martinez
  • Stéphanie Serve

    () (University of Toulouse
    University of Toulouse
    THEMA, Universite de Cergy-Pontoise)

Abstract

Relative to the decision to go public, the decision to delist is less studied in the corporate finance literature despite its importance in the life of the firm. This article surveys the recent literature, both theoretical and empirical, regarding delisting in an international context (Anglo-Saxon countries and Continental Europe). We provide a review of the growing research on delisting based on the distinction between voluntary and involuntary delistings. For voluntary delistings, also called “Going Private Transactions” (GPTs), we analyze the incentives for firms to go private and the financial characteristics of these firms. Next, we focus on involuntary delistings: why do firms undergo a delisting (violation of stock exchange requirements, poor performance) and what strategies did the managers implement to attempt to avoid delisting? Finally, we are interested in the impact of corporate governance on delisting.

Suggested Citation

  • Constant Djama & Isabelle Martinez & Stéphanie Serve, 2012. "What do we know about delistings? A survey of the literature," THEMA Working Papers 2012-38, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  • Handle: RePEc:ema:worpap:2012-38
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    File URL: http://thema.u-cergy.fr/IMG/documents/2012-38.pdf
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    References listed on IDEAS

    as
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    4. Martinez, Isabelle & Serve, Stéphanie, 2011. "The delisting decision: The case of buyout offer with squeeze-out (BOSO)," International Review of Law and Economics, Elsevier, vol. 31(4), pages 228-239.
    5. Hamid Mehran & Stavros Peristiani, 2010. "Financial Visibility and the Decision to Go Private," Review of Financial Studies, Society for Financial Studies, vol. 23(2), pages 519-547, February.
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    Cited by:

    1. Chen, Yea-Mow & Huang, Ying Sophie & Wang, David K. & Wu, Chun-Chou, 2014. "Going private transactions by U.S.-Listed Chinese companies: What drives the premiums paid?," International Review of Economics & Finance, Elsevier, vol. 32(C), pages 79-91.
    2. repec:eee:fambus:v:8:y:2017:i:2:p:74-86 is not listed on IDEAS

    More about this item

    Keywords

    delisting; going private; corporate governance;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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