Economic policy uncertainty and corporate divestitures

IF 2.2 3区管理学 Q2 BUSINESS, FINANCE

Journal of Business Finance & Accounting Pub Date : 2023-09-04 DOI:10.1111/jbfa.12747

Melissa B. Frye, Duong T. Pham, Ann Marie Whyte

引用次数: 0

Abstract

We examine the impact of economic policy uncertainty (EPU) on the propensity of firms to engage in divestitures. We find that EPU is positively related to the likelihood of divestitures in general and cashflow-generating divestitures in particular. Consistent with the desire for cash being a driving force behind divestitures, we find that underperforming firms are more likely to engage in cashflow-increasing divestitures. Firms that do not pay dividends and are relatively more reliant on government funding are also more likely to pursue sell-offs and carve-outs when economic uncertainty is elevated. We find no evidence that firms prefer staged divestitures (spin-offs and carve-outs) over non-staged (sell-offs) when EPU is high. Instead, EPU is positively related to the likelihood of non-staged divestitures suggesting that firms do not wait until uncertainty is resolved to pursue deals with a high degree of irreversibility. Our findings point to EPU as a motivator for poor-performing firms to shore up cash during times of EPU.

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经济政策的不确定性与企业资产剥离

我们研究了经济政策不确定性（EPU）对企业资产剥离倾向的影响。我们发现，经济政策不确定性总体上与资产剥离的可能性呈正相关，尤其是与产生现金流的资产剥离可能性呈正相关。我们发现，业绩不佳的公司更有可能进行增加现金流的资产剥离。当经济不确定性升高时，不分红且相对更依赖政府资助的企业也更有可能进行出售和分割。我们没有发现任何证据表明，当 EPU 高时，企业更倾向于分阶段剥离（分拆和分割），而不是非分阶段剥离（出售）。相反，EPU 与非分阶段资产剥离的可能性呈正相关，这表明企业不会等到不确定性消除后才进行不可逆转性高的交易。我们的研究结果表明，EPU 是绩差公司在 EPU 时期充实现金的动力。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Business Finance & Accounting BUSINESS, FINANCE-

CiteScore

4.40

自引率

17.20%

发文量

期刊介绍： Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.