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Article: The parent company puzzle: when is the whole worth less than one of the parts?

TitleThe parent company puzzle: when is the whole worth less than one of the parts?
Authors
Cornell, BLiu, Q
KeywordsParent company puzzle
taxes
mispricing
Issue Date2001
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin
Citation
Journal of Corporate Finance, 2001, v. 7 n. 4, p. 341-366 How to Cite?
DOI: http://dx.doi.org/10.1016/S0929-1199(01)00025-6
AbstractThis paper examines seven instances in which the market value of a parent company was less than the market value of its publicly traded subsidiary. Efforts are made to explain this 'parent company puzzle' in terms of taxes. agency costs, liquidity effects and noise trader risk. None of them work. The only explanation consistent with the evidence is a mispricing of the subsidiary shares associated with noise trader demand and impediments to arbitrage. As further evidence in support of this view. five corporate control transactions, all designed to exploit the apparent mispricing, were initiated while this research was in progress. (C) 2001 Elsevier Science B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/85715
ISSN
0929-1199
2021 Impact Factor: 5.107
2020 SCImago Journal Rankings: 1.894
SSRN
239432
ISI Accession Number ID
WOS:000172483100001

 

DC FieldValueLanguage
dc.contributor.authorCornell, Ben_HK
dc.contributor.authorLiu, Qen_HK
dc.date.accessioned2010-09-06T09:08:21Z-
dc.date.available2010-09-06T09:08:21Z-
dc.date.issued2001en_HK
dc.identifier.citationJournal of Corporate Finance, 2001, v. 7 n. 4, p. 341-366en_HK
dc.identifier.issn0929-1199en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85715-
dc.description.abstractThis paper examines seven instances in which the market value of a parent company was less than the market value of its publicly traded subsidiary. Efforts are made to explain this 'parent company puzzle' in terms of taxes. agency costs, liquidity effects and noise trader risk. None of them work. The only explanation consistent with the evidence is a mispricing of the subsidiary shares associated with noise trader demand and impediments to arbitrage. As further evidence in support of this view. five corporate control transactions, all designed to exploit the apparent mispricing, were initiated while this research was in progress. (C) 2001 Elsevier Science B.V. All rights reserved.-
dc.languageengen_HK
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfinen_HK
dc.relation.ispartofJournal of Corporate Financeen_HK
dc.rightsThis work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.-
dc.subjectParent company puzzle-
dc.subjecttaxes-
dc.subjectmispricing-
dc.titleThe parent company puzzle: when is the whole worth less than one of the parts?en_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0929-1199&volume=7&issue=4&spage=341&epage=366&date=2001&atitle=The+parent+company+puzzle:+when+is+the+whole+worth+less+than+one+of+the+parts?en_HK
dc.identifier.emailLiu, Q: qliu@hku.hken_HK
dc.description.naturepostprint-
dc.identifier.doi10.1016/S0929-1199(01)00025-6-
dc.identifier.scopuseid_2-s2.0-0038737855-
dc.identifier.hkuros82050en_HK
dc.identifier.volume7-
dc.identifier.issue4-
dc.identifier.spage341-
dc.identifier.epage366-
dc.identifier.isiWOS:000172483100001-
dc.identifier.ssrn239432-
dc.identifier.issnl0929-1199-

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