What do we learn about internal capital markets from equity carve-outs?


There is no consensus among academics whether internal capital markets (ICMs) are efficient or not. This study extends current literature by analysing two related questions with the help of a sample of European equity carve-outs (ECOs): First, what is the investors’ average judgement on the existence of ICMs? Second, what are the conditions for ICM efficiency? Investors’ opinion is assessed via the share price reaction to the announcement of an ECO, and ICM activity is measured using a series of variables constructed to reflect the size and the efficiency of a firm’s ICM.


Cash Flow Abnormal Return Investment Opportunity Capital Expenditure Parent Firm 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Deutscher Universitäts-Verlag | GWV Fachverlage GmbH, Wiesbaden 2006

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