TY  - JOUR
AU  - Schlingemann,Frederik P.
AU  - Stulz,Rene M.
AU  - Walkling,Ralph A.
TI  - Asset Liquidity and Segment Divestitures
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7873
PY  - 2000
Y2  - September 2000
UR  - http://www.nber.org/papers/w7873
L1  - http://www.nber.org/papers/w7873.pdf
N1  - Author contact info:
Frederik P. Schlingemann
Katz Graduate School of Business
University of Pittsburgh
372 Mervis Hall
Pittsburgh, PA 15260
E-Mail: schlinge@katz.pitt.edu

René M. Stulz
The Ohio State University
Fisher College of Business
806A Fisher Hall
Columbus, OH 43210-1144
Tel: 614/292-1970
Fax: 614/292-2359
E-Mail: stulz_1@cob.osu.edu
AB  - We investigate a sample of firms whose number of reported segments falls by one or more for the first time in their reporting history. The firms in our sample have a significantly larger diversification discount, underperform, and underinvest relative to comparable firms. Firms are more likely to divest segments from industries with a more liquid market for corporate assets, segments unrelated to the core activities of the firm, poorly performing segments, and small segments. The liquidity of the market for corporate assets plays an important role in explaining why some firms divest assets while others stop reporting them without divesting them, and why some firms divest core segments while others divest unrelated segments.
ER  -