The determinants of divestitures and divestiture returns in South Africa
| dc.contributor.advisor | Majoni, Akios | |
| dc.contributor.author | Leepile, Katlego Joseph | |
| dc.date.accessioned | 2020-03-17T12:50:22Z | |
| dc.date.available | 2020-03-17T12:50:22Z | |
| dc.date.issued | 2019 | |
| dc.date.updated | 2020-03-17T12:19:42Z | |
| dc.description.abstract | 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. | |
| dc.identifier.apacitation | Leepile, K. J. (2019). <i>The determinants of divestitures and divestiture returns in South Africa</i>. (). ,Faculty of Commerce ,Department of Finance and Tax. Retrieved from | en_ZA |
| dc.identifier.chicagocitation | Leepile, Katlego Joseph. <i>"The determinants of divestitures and divestiture returns in South Africa."</i> ., ,Faculty of Commerce ,Department of Finance and Tax, 2019. | en_ZA |
| dc.identifier.citation | Leepile, K.J. 2019. The determinants of divestitures and divestiture returns in South Africa. . ,Faculty of Commerce ,Department of Finance and Tax. | en_ZA |
| dc.identifier.ris | TY - Thesis / Dissertation AU - Leepile, Katlego Joseph AB - 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. DA - 2019 DB - OpenUCT DP - University of Cape Town KW - Divestitures KW - Event Study KW - Cumulative Abnormal Returns KW - South Africa. LK - https://open.uct.ac.za PY - 2019 T1 - The determinants of divestitures and divestiture returns in South Africa TI - The determinants of divestitures and divestiture returns in South Africa UR - ER - | en_ZA |
| dc.identifier.uri | https://hdl.handle.net/11427/31613 | |
| dc.identifier.vancouvercitation | Leepile KJ. The determinants of divestitures and divestiture returns in South Africa. []. ,Faculty of Commerce ,Department of Finance and Tax, 2019 [cited yyyy month dd]. Available from: | en_ZA |
| dc.language.rfc3066 | eng | |
| dc.publisher.department | Department of Finance and Tax | |
| dc.publisher.faculty | Faculty of Commerce | |
| dc.subject | Divestitures | |
| dc.subject | Event Study | |
| dc.subject | Cumulative Abnormal Returns | |
| dc.subject | South Africa. | |
| dc.title | The determinants of divestitures and divestiture returns in South Africa | |
| dc.type | Master Thesis | |
| dc.type.qualificationlevel | Masters | |
| dc.type.qualificationname | MCom |