Evidence of Wealth Effect of Corporate Spin-Offs in China

1
Yi-Hong Lin
Yi-Hong Lin
2
Teik-Wei Yoon
Teik-Wei Yoon
3
Annuar Bin Md Nassir
Annuar Bin Md Nassir
4
Chung-Sin Yoon
Chung-Sin Yoon

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Evidence of Wealth Effect of Corporate Spin-Offs in China Banner
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Is corporate spin-offs less attended as a wealth-generating asset restructuring in the People’s Republic of China (China)?. Was the wealth effect of China’s corporate spin-off occurring in the State Capital Economy? Although China’s Initial Public Offering (IPO) incidences and volumes are vigorous, China’s corporate spin-offs started late and lack extensive applications. In July 2020 alone, a total of seventy-five companies completed IPO in mainland China and abroad despite the outbreak of the COVID-19 pandemic. This paper aimed to provide evidence on the wealth effect of the combination of China corporate spin-off announcements, parent and subsidiary. We took twenty-four Chinese listed companies that have been successfully spin-off as a whole to explore the corporate spin-off wealth effect on their market value, and the empirical results of positive returns were convincing. Compared with the prior corporate spin-off researches in China, this paper is more comprehensive as we examined the shareholders’ wealth effect of the corporate spin-off announcements from the years 2000 to 2018 in the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE).

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No external funding was declared for this work.

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The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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Not applicable for this article.

Yi-Hong Lin. 2021. \u201cEvidence of Wealth Effect of Corporate Spin-Offs in China\u201d. Global Journal of Human-Social Science - A: Arts & Humanities GJHSS-A Volume 21 (GJHSS Volume 21 Issue A7): .

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Crossref Journal DOI 10.17406/GJHSS

Print ISSN 0975-587X

e-ISSN 2249-460X

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GJHSS-A Classification: FOR Code: 950199
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v1.2

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June 11, 2021

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English

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Is corporate spin-offs less attended as a wealth-generating asset restructuring in the People’s Republic of China (China)?. Was the wealth effect of China’s corporate spin-off occurring in the State Capital Economy? Although China’s Initial Public Offering (IPO) incidences and volumes are vigorous, China’s corporate spin-offs started late and lack extensive applications. In July 2020 alone, a total of seventy-five companies completed IPO in mainland China and abroad despite the outbreak of the COVID-19 pandemic. This paper aimed to provide evidence on the wealth effect of the combination of China corporate spin-off announcements, parent and subsidiary. We took twenty-four Chinese listed companies that have been successfully spin-off as a whole to explore the corporate spin-off wealth effect on their market value, and the empirical results of positive returns were convincing. Compared with the prior corporate spin-off researches in China, this paper is more comprehensive as we examined the shareholders’ wealth effect of the corporate spin-off announcements from the years 2000 to 2018 in the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE).

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Evidence of Wealth Effect of Corporate Spin-Offs in China

Yi-Hong Lin
Yi-Hong Lin
Teik-Wei Yoon
Teik-Wei Yoon
Annuar Bin Md Nassir
Annuar Bin Md Nassir
Chung-Sin Yoon
Chung-Sin Yoon

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