The Institutionalization of Divestitures: A Meta-Analysis of Stock Market Performance Cover

The Institutionalization of Divestitures: A Meta-Analysis of Stock Market Performance

ISBN/ASIN: 9783834916709,9783834994677 | 2009 | German | pdf | 110/119 pages | 1.85 Mb
Publisher: Gabler Verlag | Author: Miriam Flickinger (auth.) | Edition: 1

Restructuring and, therein, divestitures have become an indispensable element of corporate strategy for many firms. Divestitures, defined as a firm’s decision to dispose of a significant portion of its assets, can increase a firm’s strength by changing its asset structure and its resource allocation patterns.

Miriam Flickinger investigates the stock market reaction to divestiture announcements from an institutionally-based perspective. In the spirit of organizational theory, this perspective applies the processes of institutionalization to capital markets. It analyzes how organizational practices and policies are perceived by a capital market in which socio-organizational factors play an influential role. Using meta-analytic procedures, the author extends the present financially dominated understanding of divestiture performance implications and offers a new rationale to why shareholders consider divestitures positively. Results show that divestitures are socially embedded when the value of a firm’s divestiture depends on the prevailing institutional logics within the business society.

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The Institutionalization of Divestitures: A Meta-Analysis of Stock Market Performance

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