A Relook into the Impact of Divestitures in the Presence of Agency Conflicts: Evidence from Property Subsidiary Sell-Offs in China

《A Relook into the Impact of Divestitures in the Presence of Agency Conflicts: Evidence from Property Subsidiary Sell-Offs in China》

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关键字: Divestiture; Property sell-offs; SOEs; Agency costs; China; ASSET SALES; CORPORATE GOVERNANCE; OWNERSHIP STRUCTURE; SHAREHOLDER WEALTH; ANNOUNCEMENTS; SHARE; PRIVATIZATION; PERFORMANCE; BEHAVIOR; MARKET

作者单位: [Xu, Ruoran] Southwestern Univ Finance & Econ, Sch Secur & Futures, Chengdu 611130, Sichuan, Peoples R China. [Chow, Yuen Leng; Ooi, Joseph T. L.] Natl Univ Singapore, Dept Real Estate, Singapore 117566, Singapore. Xu, RR (reprint author), Southwestern Univ Finance & Econ, Sch Secur & Futures, Chengdu 611130, Sichuan, Peoples R China. E-Mail: xuruoran@swufe.edu.cn; yuenleng@nus.edu.sg; rstooitl@nus.edu.sg

摘要: We analyze property subsidiary sell-offs in China to examine her market reaction to firms' divestiture decisions. Overall, the response from the stock market is neutral. However, detailed analysis reveals that the market reacts differently to property subsidiary sell-off announcements by state-owned enterprises (SOEs) and non-SOEs. Consistent with findings from extant literature, we find statistically positive market returns associated with non-SOE sell-off announcements. However, we find statistically negative market returns associated with SOE sell-off announcements. We suggest that this divergent market reaction is influenced by the institutional feature of the Chinese market and is consistent with the high agency costs associated with state ownership.