Study On Financial Affairs Of Asset Divestiture For Listed Company

Asset divestiture is a process that listed company divest assets which include non-working dormant assets, nonprofit assets, assets have achieved the goal and other assets that impair listed company's interests. It is a concrete way to reorganize assets structure and enterprise curtailment strategy of operation. Asset divestiture has become a focus of accounting research since the 1990s. The motives to asset divestiture include realizing official standard, bettering performance, improving the efficiency of management, reallocating the benefits of stockholders and creditors, escaping regulations, evading taxes, and so on. Because of the influence of both macroenvironment and microenvironment, the shell resources of listed company are the focuses of stakeholders' interest concerned. Generally accepted, a listed company in trouble, that has no hope to improve rapidly, will divest assets to maintain it's financing qualification in security market.Hypotheses about asset divestiture for a listed company are put forward in this article, such as its capacity, time of efficacy, scale and impact when some other factors are got rid of.Based on the deep analysis of the relationship between asset divestiture and state of operation in a listed company, we construct a mathematic model by Logistic Regression Method. Through a sample of 128 A Shares companies form Shanghai Stock Exchange, we found the empirical evidence showing the link between state of operation and asset divestiture for a listed company. The state of operation can mostly determine whether a company divests assets or not. The motive level of asset divestiture goes against the management performance. Some policy suggestions are put forward in this study, such as cultivating good institutional environment, providing information more quickly, more sufficient and more correlative, perfecting the corporation governance structure, strengthening monitoring of stock market and carrying forward lofty culture to create good public opinion environment.