Why do listed companies delist themselves voluntarily? An empirical study of the Tokyo Stock Exchange and the construction and real estate industries
Journal of Financial Management of Property and Construction
ISSN: 1366-4387
Article publication date: 21 August 2018
Issue publication date: 21 August 2018
Abstract
Purpose
This study aims to analyse, from a corporate finance and governance perspective, the reasons why managers decide to delist their companies from a stock exchange. On the basis of the five hypotheses of voluntary delisting, this study examines why listed companies delist themselves voluntarily in the construction and real estate sectors.
Design/methodology/approach
By using actual data to examine contractors and real estate companies listed on the Tokyo Stock Exchange between 2004 and 2014, this study analyses whether these companies delist themselves voluntarily. The pooled binary logit model is used as the statistical method.
Findings
In both the construction and real estate sectors, the concentration of shareholders has a significantly positive effect on voluntary delisting, thus supporting the transfer of wealth effect hypothesis. In construction, market capitalisation has a significantly negative effect on voluntary delisting, thus supporting the maintenance cost reduction hypothesis. In the real estate sector, the ratio of market capitalisation to total assets has a significantly negative effect on voluntary delisting, thus supporting the undervalue elimination hypothesis.
Originality/value
By comparing the construction and real estate sectors, this study reveals both unique and common reasons for voluntary delisting in each sector. It also offers valuable insights to managers, regulators setting standards in securities markets and investors.
Keywords
Citation
Konno, Y. and Itoh, Y. (2018), "Why do listed companies delist themselves voluntarily? An empirical study of the Tokyo Stock Exchange and the construction and real estate industries", Journal of Financial Management of Property and Construction, Vol. 23 No. 2, pp. 152-169. https://doi.org/10.1108/JFMPC-02-2017-0006
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited