Corporate Spin-offs and Operational Performance : Evidence from Nordic Listed Companies

Abstract

This study examines whether corporate spin-offs improve the operational performance of Nordic listed companies. The study focuses on listed companies in Finland, Sweden, Norway, and Denmark, and aims to contribute to the existing research on the effects of spin-offs in the Nordic markets. The empirical analysis is based on a sample consisting of 113 spin-off transactions that took place between 2004 and 2022. Operating performance is measured by return on assets, and post-spin-off changes are assessed using panel regression models with firm-fixed and year-fixed effects. In addition, an event-time analysis is conducted to examine whether the effects on performance appear gradually before and after the transaction. The results do not suggest that spin-offs lead to statistically significant improvements in operating performance. The post-spin-off effect is statistically insignificant in all regression models. The event-time analysis also shows that companies’ operating performance is relatively strong even before the spin-off, whereas no significant improvements are observed after the event. Furthermore, leverage is found to be negatively correlated with operational performance, while firm size is found to be positively correlated with profitability.