Çolak, Gönül and Whited, Toni M (2007) Spin-offs, divestitures, and conglomerate investment. Review of Financial Studies, 20 (3). pp. 557-595. ISSN 0893-9454

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Abstract

We examine whether spin-offs or divestitures cause improvements in conglomerate investment efficiency. At issue are endogeneity of these restructuring decisions and correct measurement of investment efficiency. Endogeneity is a problem because the factors that induce firms to spin off or divest divisions may also improve investment efficiency; measurement error is a problem because efficiency measures employ Tobin's q as a noisy proxy for investment opportunities. We find important differences between firms that divest or spin off and a control sample. After accounting for these differences and for measurement error in q, we find no evidence of improvements in investment efficiency. © The Author 2006.

Item Type:	Article
Schools and Departments:	University of Sussex Business School > Accounting and Finance
SWORD Depositor:	Mx Elements Account
Depositing User:	Mx Elements Account
Date Deposited:	22 Feb 2022 09:54
Last Modified:	22 Feb 2022 10:00
URI:	http://sro.sussex.ac.uk/id/eprint/104494

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