Asset sales by manufacturing firms in India Report as inadecuate




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Abstract

In this paper we study 325 large scale asset sale transactions by Indian manufacturing firms in the period 1996 to 2008. We find that the likelihood of asset sales increases with the firm’s low capacity of debt utilisation and decreases with size, profitability, operating performance and solvency. We also find that the performance of firms after they sell assets do not improve in profitability, solvency or operations. The only difference the episodes of asset sales make is some reduction in leverage. We contrast with the existing episodes of asset sales in developed countries as the performance of firms there, after they sell assets, improves in all parameters.



Item Type: MPRA Paper -

Original Title: Asset sales by manufacturing firms in India-

Language: English-

Keywords: asset sales; focus; low capacity of debt utilisation; size; profitability; operating performance; solvency; leverage-

Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: TheoryG - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting ; Fixed Investment and Inventory Studies ; CapacityG - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; GoodwillG - Financial Economics > G3 - Corporate Finance and Governance > G33 - Bankruptcy ; Liquidation-





Author: Gautam, Vikash

Source: https://mpra.ub.uni-muenchen.de/35430/







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