The Impact and Its Performing Mechanism of Divestiture on Financial Performance

GUO Wei; GUO Ze-guang

Volume 35 Issue 2

May 2021

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GUO Wei, GUO Ze-guang. The Impact and Its Performing Mechanism of Divestiture on Financial Performance[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(2): 55-67.

Citation:

GUO Wei, GUO Ze-guang. The Impact and Its Performing Mechanism of Divestiture on Financial Performance[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(2): 55-67.

GUO Wei, GUO Ze-guang. The Impact and Its Performing Mechanism of Divestiture on Financial Performance[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(2): 55-67.

Citation:

GUO Wei, GUO Ze-guang. The Impact and Its Performing Mechanism of Divestiture on Financial Performance[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(2): 55-67.

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The Impact and Its Performing Mechanism of Divestiture on Financial Performance

School of Accounting, Shanxi University of Finance and Economics, Taiyuan 030006, China

Received Date: 2019-11-12
Available Online: 2021-05-15
Publish Date: 2020-04-28

Abstract

Abstract

Using a unique sample constituted by the 2008-2017 A-share listed companies in China, this paper empirically tests the impact of divestitures on corporate financial performance. It is found that the implementation of asset divestiture can significantly improve the financial performance of enterprises, the influence of divestitures depends on the prior performance of the companies. Divestitures can significantly improves the financial performance of higher-performing companies, and vice versa. The findings from mechanism research indicate that financing constraints and investment efficiency play an intermediary role in the negative and positive relationship respectively between divestiture and corporate financial performance.
- divestiture,
- financial performance,
- financing constraints,
- investment efficiency,
- mediation effect

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References(38)

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