Abstract

Is corporate spin-offs less attended as a wealth-generating asset restructuring in the People s Republic of China China Was the wealth effect of China s corporate spin-off occurring in the State Capital Economy Although China s Initial Public Offering IPO incidences and volumes are vigorous China s corporate spin-offs started late and lack extensive applications In July 2020 alone a total of seventy-five companies completed IPO in mainland China and abroad despite the outbreak of the COVID- 19 pandemic This paper aimed to provide evidence on the wealth effect of the combination of China corporate spin-off announcements parent and subsidiary We took twenty-four Chinese listed companies that have been successfully spin-off as a whole to explore the corporate spin-off wealth effect on their market value and the empirical results of positive returns were convincing Compared with the prior corporate spin-off researches in China this paper is more comprehensive as we examined the shareholders wealth effect of the corporate spin-off announcements from the years 2000 to 2018 in the Shanghai Stock Exchange SSE and Shenzhen Stock Exchange SZSE