THE IMPACT OF DIVESTMENT ON FIRM VALUE AND FIRM PERFORMANCE OF VIETNAM LISTED COMPANY

Abstract

This paper focused on analyzing the sample of 94 divestment announcements in order to address the impact of divestment on firm value and firm performance in Vietnam market. Consistent with the previous research, the group of authors finds out that there are some positive impacts of divestment announcement on firm value in short-term and also the divestment activity could affect positively on firm performance in long-term. In addition, the main methods which have been used to conduct the study are event-study model and analyzing financial indexes (including ROA, ROE, and Tobin’s q ratio). Finally, this study gave an overview about divestment, then suggested how investors and companies should consider it as a potential opportunity. Keywords: Divestment, Event-study, ROA, ROE, Tobin’s q, firm value, firm performance.