Divestments in banking: Preliminary evidence on the role of external factors

Divestment constitutes an important method of corporate restructuring. Despite this fact, the banking literature on divestment is very limited. In this text, we try to remediate partially to the shortcomings of the existing literature by examining empirically the role of external factors. Using a la...

Full description

Saved in:
Bibliographic Details
Published in:Contemporary economics 2011-06, Vol.5 (2), p.30-41
Main Authors: Jackowicz, Krzysztof, Kowalewski, Oskar
Format: Article
Language:English
Subjects:
Abnormal returns
Banking
Banking industry
Corporate governance
Countries
Divestiture
Divestment
Divestments
Economic conditions
external factors
Financial systems
Foreign subsidiaries
Hypotheses
International economic relations
Literature reviews
Macroeconomics
Ownership changes
Securities markets
Stockholders
Studies
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Divestment constitutes an important method of corporate restructuring. Despite this fact, the banking literature on divestment is very limited. In this text, we try to remediate partially to the shortcomings of the existing literature by examining empirically the role of external factors. Using a large sample of 313 transactions, we have established that parent companies originate from countries with relatively high accumulated wealth, slow GDP growth, stable macroeconomic situation and dominant bank intermediation in financial system. The acquirers in turn come from poorer countries with faster economic growth and relatively more market-oriented financial systems. Those results broadly conform with the predictions of three hypotheses formulated in the text, namely the weak performance hypothesis, the corporate governance hypothesis and the rebalancing hypothesis.
ISSN:1897-9254
2084-0845
2300-8814
DOI:10.5709/ce.1897-9254.10