The Effects Of Divestiture On The Performance Of Listed Companies

In recent years,as the asset restructuring strategy used by more and more listed companies,this paper selects 44 mining listed companies as samples,and uses asset stripping data,financial indicators of these 44 mining listed companies from 2005 to2018,to construct a panel data set.Then the paper uses the interactive fixed effect model to do the empirical analysis about the impact of divestiture on the performance of mining listed companies.The empirical results show that the debt to asset ratio of mining listed companies,the earnings per share,the growth rate of main business income and the ratio of main business income to accounts receivable turnover increase by the asset stripping strategy,which indicates that mining listed companies significantly improve the debt paying ability,profitability,development ability and operation ability through the divestiture.According to the different enterprise retained earnings ratio,the mining industry of the listed company is divided into infantilism mining listed companies,growth type mining listed companies and maturity mining listed companies.We analyze the impact of asset divestiture on the profitability,debt paying ability,development ability and operation ability of mining listed companies in different life cycle.The empirical results show that listed mining companies in their infancy stage can enhance their solvency,profitability,development ability significantly by divesting assets.The mining listed companies in the growth stage have the positive influence on the solvency,profitability and development ability,conversely,have the negative influence on the operation ability of listed mining companies through asset divestiture.All of these four abilities have not passed the significant test.The listed mining companies in the mature stage can enhance the profitability of the listed mining companies through asset stripping significantly.It shows that with the development of mining listed companies,the uncertainty of divestiture effect increases.Therefore,as a cyclical industry,mining industry has entered into the recession period.Although divestiture can improve enterprise performance,mining listed companies should still implement divestiture carefully according to their different subdivision areas and growth stages of enterprises to achieve the goal of successful transformation.