On Delisting of Corporations: a Three-Dimensional Classification Framework for Voluntary Delistings

The study of the effects of delisting on the dynamics of value and governance of delisted companies represents a very promising research opportunity for international scholars. This paper addresses a preliminary question, i.e. how, in the face of a complex phenomenon with a significant number of highly differentiating characteristics, it is possible to avoid the risk that a conjunct observation of operations that differ too much one from the other might raise significant obstacles to the application of the main models of qualitative and/or quantitative analysis. We define a classification framework that deepens the fundamental distinction between voluntary and involuntary delistings. A particular focus is on voluntary delistings, which we differentiate in the light of three main characterising features: i) the subjects who pursue delisting, ii) the underlying strategic context and iii) the operating conditions of the delisted company. Our three-dimensional classification framework defines eight homogeneous areas of observation (pre-sale delistings, hidden potential delistings, control strengthening delistings and takeover delistings, either in balanced operating conditions or in presence of crisis/operating distress) and may be a useful starting point for future studies on the effects of delisting on the dynamics of value and governance of the delisted company.