Corporate restructuring, financial deregulation, and firm value: Evidence from Japanese “spin-ins”

Yoon K. Choi and Seung Hun Han

Pacific-Basin Finance Journal, 2013, vol. 22, issue C, 1-13

Abstract: This paper examines the impact on firm value from the restructuring process of the keiretsu system due to Japan's deregulation. We focus on unique internal restructuring transactions called “spin-ins” that are triggered by the Amendment of the Commercial Code in 2001. We show that significant positive abnormal returns exist around the announcement of the spin-ins. These announcement returns have a positive relation to keiretsu affiliation and bank financing. Also, we find that Japanese spin-ins result in a significant improvement in investment-Q sensitivity, especially for keiretsu firms. Our results support the argument that the keiretsu system has transformed itself into a more efficient organization through the recent deregulation in financial markets.

Keywords: Keiretsu; Deregulation; Internal restructuring (search for similar items in EconPapers)
JEL-codes: G34 G38 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:22:y:2013:i:c:p:1-13

DOI: 10.1016/j.pacfin.2012.11.001

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