Firm investment, finance constraint and voluntary asset sales: the evidence from Indian manufacturing firms

Vikash Gautam, Rajendra Vaidya
2013 Macroeconomics and Finance in Emerging Market Economies  
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
more » ... rage. 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.
doi:10.1080/17520843.2012.725419 fatcat:dgabq567rzhmxd3x3wjehqjhxu