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Contribution Details
| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Market Reactions to Divestiture Announcements: Which Firms benefit the most? |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 37 |
| Date | 2021 |
| Abstract Text | The primary purpose of the thesis is to analyze whether the decision and the announcement of a company to engage in a significantly large divestiture can yield positive abnormal market returns. The event-study methodology is employed for this purpose by utilizing two models to calculate the expected returns. The results for both models indicate a positive and significant market reaction for divesting firms during the announcement day as well as during a small event window. In addition, the study hypothesizes that conglomerate firms would benefit even more from divesting and that high managerial ownership would result in more divestitures. However, both of these hypotheses could not be confirmed in the analysis. |
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