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 |
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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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