Is there shareholder expropriation in the United States? an analysis of publicly traded subsidiaries

Vladimir Atanasov, Audra Boone, David Haushalter

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

Abstract

This paper examines the relation between the performance and valuations of publicly traded subsidiaries in the United States and the ownership stake of their parent companies. Cross-sectional and time-series tests demonstrate that subsidiaries of parents that own a substantial minority stake exhibit negative peer-adjusted operating performance and are valued at a 23% median discount relative to peers. In contrast, majority-owned and fully divested subsidiaries show no abnormal performance or valuations. The results of our study indicate that the association between parent ownership and subsidiary performance is nonlinear and that some parents behave opportunistically toward their publicly traded subsidiaries.

Original languageEnglish (US)
Pages (from-to)1-26
Number of pages26
JournalJournal of Financial and Quantitative Analysis
Volume45
Issue number1
DOIs
StatePublished - Feb 2010

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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