Full Text Available
Note: Clicking the button above will open the full text document at the original institutional repository in a new window.
The determinants of divestitures and divestiture returns in South Africa
This study investigates the determinants of divestitures, the impact of divestitures on shortterm firm value and the determinants of divestiture returns in South Africa. The study is based on a sample of 46 non-financial firms listed on the Johannesburg Stock Exchange (JSE) between 2000 and 2014. Lo...
Saved in:
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Thesis |
| Language: | English |
| Published: |
Department of Finance and Tax
2020
|
| Subjects: | |
| Tags: |
No Tags, Be the first to tag this record!
|
| _version_ | 1867613263744729088 |
|---|---|
| access_status_str | Open Access |
| author | Leepile, Katlego Joseph |
| author2 | Majoni, Akios |
| author_browse | Leepile, Katlego Joseph Majoni, Akios |
| author_facet | Majoni, Akios Leepile, Katlego Joseph |
| author_sort | Leepile, Katlego Joseph |
| collection | Thesis |
| description | This study investigates the determinants of divestitures, the impact of divestitures on shortterm firm value and the determinants of divestiture returns in South Africa. The study is based on a sample of 46 non-financial firms listed on the Johannesburg Stock Exchange (JSE) between 2000 and 2014. Logit regressions found CEO Turnover, a measure of corporate focus and Return on Assets (ROA), a measure of corporate efficiency, to be the only statistically significant determinants of divestitures in South Africa. However, Sales growth, Return on Equity (ROE), Debt to Total Assets (D-t-A), Debt to Equity (D-t-E), the current ratio, and the interest coverage ratio did not possess statistical significance as determinants of divestitures in South Africa. The study also investigated the impact of divestitures on short-term shareholder wealth and found that divestitures have a statistically significant positive impact on short-term firm value in South Africa. Finally, the study also investigated the determinants of divestiture returns. Cross-sectional regressions conducted on the full sample of divesting firms found that leverage has a statistically significant effect on divestiture returns in South Africa; however, firm size and efficiency do not have a statistically significant effect on divestiture returns. In order to further understand the determinants of divestiture returns in South Africa the study also separated the portfolio of divesting firms into subsamples. The study found that larger firms report superior abnormal returns than smaller firms, firms with lower levels of efficiency report superior abnormal returns than firms with higher levels of efficiency, and highly-levered firms report superior abnormal returns than lower-levered firms in South Africa. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/31613 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:33:21.255Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2020 |
| publishDateRange | 2020 |
| publishDateSort | 2020 |
| publisher | Department of Finance and Tax |
| publisherStr | Department of Finance and Tax |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/31613 The determinants of divestitures and divestiture returns in South Africa Leepile, Katlego Joseph Majoni, Akios Divestitures Event Study Cumulative Abnormal Returns South Africa. This study investigates the determinants of divestitures, the impact of divestitures on shortterm firm value and the determinants of divestiture returns in South Africa. The study is based on a sample of 46 non-financial firms listed on the Johannesburg Stock Exchange (JSE) between 2000 and 2014. Logit regressions found CEO Turnover, a measure of corporate focus and Return on Assets (ROA), a measure of corporate efficiency, to be the only statistically significant determinants of divestitures in South Africa. However, Sales growth, Return on Equity (ROE), Debt to Total Assets (D-t-A), Debt to Equity (D-t-E), the current ratio, and the interest coverage ratio did not possess statistical significance as determinants of divestitures in South Africa. The study also investigated the impact of divestitures on short-term shareholder wealth and found that divestitures have a statistically significant positive impact on short-term firm value in South Africa. Finally, the study also investigated the determinants of divestiture returns. Cross-sectional regressions conducted on the full sample of divesting firms found that leverage has a statistically significant effect on divestiture returns in South Africa; however, firm size and efficiency do not have a statistically significant effect on divestiture returns. In order to further understand the determinants of divestiture returns in South Africa the study also separated the portfolio of divesting firms into subsamples. The study found that larger firms report superior abnormal returns than smaller firms, firms with lower levels of efficiency report superior abnormal returns than firms with higher levels of efficiency, and highly-levered firms report superior abnormal returns than lower-levered firms in South Africa. 2020-03-17T12:50:22Z 2020-03-17T12:50:22Z 2019 2020-03-17T12:19:42Z Master Thesis Masters MCom https://hdl.handle.net/11427/31613 eng application/pdf Department of Finance and Tax Faculty of Commerce |
| spellingShingle | Divestitures Event Study Cumulative Abnormal Returns South Africa. Leepile, Katlego Joseph The determinants of divestitures and divestiture returns in South Africa |
| thesis_degree_str | Master's |
| title | The determinants of divestitures and divestiture returns in South Africa |
| title_full | The determinants of divestitures and divestiture returns in South Africa |
| title_fullStr | The determinants of divestitures and divestiture returns in South Africa |
| title_full_unstemmed | The determinants of divestitures and divestiture returns in South Africa |
| title_short | The determinants of divestitures and divestiture returns in South Africa |
| title_sort | determinants of divestitures and divestiture returns in south africa |
| topic | Divestitures Event Study Cumulative Abnormal Returns South Africa. |
| url | https://hdl.handle.net/11427/31613 |
| work_keys_str_mv | AT leepilekatlegojoseph thedeterminantsofdivestituresanddivestiturereturnsinsouthafrica AT leepilekatlegojoseph determinantsofdivestituresanddivestiturereturnsinsouthafrica |