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Asset Sales in the Theory of Finance

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Asset Sales

Part of the book series: SpringerBriefs in Finance ((BRIEFSFINANCE))

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Abstract

Theoretical models of asset sales view those transactions either as a means to improve firm asset efficiency or as a means to raise capital. Divestiture decision models assume that divestiture is motivated by an attempt to restructure firms’ asset mix and business combinations, with most of the literature in this area focusing on exogenous factors such as macroeconomic and business cycle volatility, industry shocks driven by technology transformation, and regulatory changes. Asset-sale theory, paralleling the theory of corporate mergers and acquisitions, has directed its attention to predict “why” sales take place, “when” they will occur, and “who will sell what to whom.” In this chapter, we provide an overview of the theoretical frameworks for studying asset sales that have emerged from the research in this area.

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Notes

  1. 1.

    Moreover, even when industry buyers have financial slack, or can raise funds to buy competitors’ assets, there could be antitrust and other government regulations that prevent them from purchasing the liquidated assets of competitors.

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Authors and Affiliations

  1. Faculty of Economics and Management, Free University of Bozen-Bolzano, Bozen-Bolzano, Italy

    Claudia Curi & Maurizio Murgia

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  1. Claudia Curi
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  2. Maurizio Murgia
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Curi, C., Murgia, M. (2020). Asset Sales in the Theory of Finance. In: Asset Sales. SpringerBriefs in Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-49573-2_3

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