Do Spinoffs Create Value in Hong Kong?

Tai-Leung, Terence Chong and Wai-Hong, Daniel Wong and Liew, Venus Khim-Sen (2006) Do Spinoffs Create Value in Hong Kong? Journal of Asia Business Studies, 4 (1). pp. 23-32. ISSN 1558-7894

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There is a broad consensus in the literature that spinoffs tend to create value for shareholders and exhibit positive long-run excess returns. However, most of the prior studies are confined to the US and the European cases. The spinoff problems in Hong Kong are surprisingly under-studied despite its important role as a global center of capital formation. In this paper, we find that there is a short-run value creation for the Hong Kong spinoffs. However, the financial health of the spinoff companies, measured by various financial ratios, tends to deteriorate in the long-run. In general, Hong Kong spinoffs generate negative returns to investors.

Item Type: Article
Uncontrolled Keywords: Spinoff, Value creation, Cash ratio, Current ratio, Debt‐to‐Equity Ratio, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > HB Economic Theory
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 16 Jun 2017 06:47
Last Modified: 12 Jul 2021 16:10

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