We analyse a unique sample of 165 foreign divestitures by UK firms 1986-1995. These divestitures lead to significantly positive shareholder wealth effects of 4.8% over the 10 days before and after the announcement date. They are several times larger than the corresponding wealth effects reported...

We provide evidence that ex ante misvaluation matters for merger activities in the UK 1986-2002 using a sample of 302 bidders and targets. Sector or long-run misvaluation causes merger firms to be more overvalued than nonmerger firms. Acquirers are overvalued absolutely and relative to targets...

This paper uses an event study approach to examine the performance improvements accruing to those UK firms making assets sales in a single divestiture. It is found that a divestiture announcement leads to an increase in shareholders' wealth of between 0.81% and 1.04% depending on the expected...

We investigate whether divestitures are associated with changes in operating performance. We evaluate the total operating performance of a pro-forma combination of seller and buyer firm in each divestiture and of the seller and buyer firms separately. We control for industry performance,...

The changes in operating performance associated with asset sales are investigated for a sample of UK firms. Asset sales are followed by an improvement of 11% per annum in the level of operating performance relative to the pre-sale performance level. Further, improved abnormal operating...

This paper employs an incremental approach to explore the determinants of corporate debt financing strategies such as the factors of the issuing costs, information asymmetry, growth opportunity, credit quality and managerial ownership. Addition to univariate analysis model, we use multiple logit...

The base currency effect in the purchasing power parity (PPP) literature refers to the stylized fact that tests on German mark real exchange rates are more likely to support mean reversion than analogous tests on US dollar rates. Using a panel of 19 OECD currencies, 1973-97, we employ different...

Commodity futures market efficiency has commonly been investigated in the standard I(1)-I(0) cointegration framework and it has provided inconclusive and conflicting results. However, recent empirical studies have found that the spot-futures basis is a fractionally integrated or long memory...