This study analyzed the effects of equity carve-outs (ECOs) on parent company shareholder wealth. Analysis of ECOs from 1986 to 1996 showed that the cumulative average abnormal return (CAAR) of parent companies was a significant +0.65% during the event period. However, there was a clear difference between same-industry ECOs, where the CAAR was -0.23%, and cross-industry ECOs, where the CAAR was +1.00%. Both controlling ECOs (where the parent retained more than 50% ownership) and non-controlling ECOs (50% or less) showed positive CAARs during the event period, but non-controlling ECOs exhibited negative CAARs thereafter. Cross-sectional regression analysis showed that overall, parent company ROA had a significant negative effect on the parent's CAAR during the event period, and parent company leverage had a significant negative value only in the case of cross-industry ECOs. In contrast, subsidiary leverage had a significant positive effect on the parent's CAAR overall. In the case of same-industry ECOs, the retained ownership ratio had a significant positive value. In summary, while the effect of ECOs on parent companies in Korea is significant, it does not exhibit a consistent pattern. Furthermore, the finding that same-industry ECOs have a persistent negative effect on the parent's stock price while cross-industry ECOs have a persistent positive effect has significant implications from the perspectives of industrial policy and corporate restructuring.