Asset Allocation as a Tool to Improve Business Performance of Non-financial Companies

Student: Zhukova Ekaterina

Educational Programme: Corporate Finance (Master)

Final Grade: 8

Year of Graduation: 2018

Divestitures are used to increase the efficiency of the company. To analyze the impact of divestitures on market value of the parent company, we examined 416 divestiture transactions of non-financial companies' assets performed during 2007-2018 in emerging markets. The results of the research showed that divestitures in emerging markets create value for shareholders both in a 3-day and 15-day periods. At the same time, the success of a divestiture transaction when creating a value is higher if it is performed for a non-core asset. Evidence shows that, on average, affiliation of the industry to innovative increases the value of the company as a result of divestiture, while the transaction made during crisis adversely affects the value creation.

Full text (added May 22, 2018)

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