Firm-specific resources and foreign divestments via selloffs: Value is in the eye of the beholder

Konara, Palitha; Ganotakis, Panagiotis

doi:10.1016/j.jbusres.2020.01.050

Cited by 42 publications

(32 citation statements)

References 105 publications

(178 reference statements)

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“…At the level of the host country, the probability of divestment is lower when local demand in the country is growing (Benito, 1997;Shaver et al, 1997;Konara and Ganotakis, 2020;Song, 2015). High or rising labor costs in the host country, on the other hand, undermine profitability and reduce the chances of survival of subsidiaries (Belderbos and Zou, 2009;Pennings and Sleuwaegen, 2000).…”

Section: Background: Determinants Of Subsidiary Divestmentsmentioning

confidence: 99%

“…The data are then converted into dollars using exchange rate information obtained from the United Nation's National Accounts Main Aggregates Database-Exchange Rates and Population. Host country demand conditions are reflected in the variable demand growth, calculated as the moving average of real GDP growth rate in the preceding three years using information from the Penn World Tables 8.1 (Konara and Ganotakis, 2020;Berry, 2013;Song, 2015;Benito, 1997). 2 While the size of the market is 1 We note that information on subsidiary purpose is not available for each subsidiary, but at the parent firm level the coverage is sufficient to derive a measure of efficiency orientation at the MNC level.…”

Section: Focal Independent Variablesmentioning

confidence: 99%

“…Host country environmental conditions have also been shown to affect divestment decisions. Firms are more likely to divest subsidiaries in host countries with negative growth prospects (Benito, 1997;Delios and Beamish, 1999;Konara and Ganotakis, 2020;Song, 2015), increased factor costs (Belderbos and Zou, 2009;Pennings and Sleuwaegen, 2000), institutional instability and deteriorated policy environments (Henisz and Delios, 2001;Dhanaraj and Beamish, 2004;Tan and Sousa, 2018;Blake and Moschieri, 2017;Dai, Eden and Beamish, 2017) and asymmetries with political freedom or other institutions in the home country (Soule et al, 2014;Gaur and Lu, 2007).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

Belderbos

Michiel²,

Sleuwaegen

et al. 2021

Journal of World Business

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Section: Background: Determinants Of Subsidiary Divestmentsmentioning

confidence: 99%

Section: Focal Independent Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

Belderbos

Michiel²,

Sleuwaegen

et al. 2021

Journal of World Business

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“…transactional and transformational leadership. Leadership styles will enhance the firm's financial performance (Pham & Kim, 2019;Konara & Ganotakis, 2020). The analysis of the paper concentrated on the mentioned questions and postulated the answers in the conclusion section (1) what is the impact of financial resources utilization on firm financial performance?…”

Section: Introductionmentioning

confidence: 99%

The Impact of Environmental Sustainability and Financial Resources Utilization on Firm Financial Performance: The Mediating Role of Leadership Styles

Tanveer

Anwer

Umar

2021

ASSAP

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The paper aims to explore the impact of environmental sustainability and financial resources utilization on a firm’s financial performance through the mediation of leadership style in the manufacturing sector of Pakistan. First, a conceptual framework is devised among the relationship of exogenous and endogenous variables and the hypotheses are examined conferring to the relationships in the conceptual framework. Data is collected using a questionnaire from a sample of 47 registered manufacturing firms (Chemical, Pharmaceuticals). Then, the study is supported by neoclassical theory, resource-based theory, and financial slaked theory, multiple regression analyses are implemented with the data analyzed by the partial least square equation. The research results indicate that the utilization of financial resources has a positive relationship with firm financial performance. In the short run, the adoption of environmental sustainability is negatively related to the firm financial performance with a transactional leadership style, but in the long run, it will give positive impacts on the firm financial performance with transformational leadership. The comparative analysis of Leadership styles showed that transactional leadership style mediates better results than transformational leadership for the manufacturing sector of Pakistan. The study affords the modern ways, provides new insights to organizations, top management, and policymakers for the implementation of environmental sustainability and leadership skills for enhancing firm performance.

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“…Due to the financing constraints from the external capital market, the firm acquires funding by selling off their business unit or subsidiaries (Kolev, 2016). Through this defensive, the firm does not only receive the additional cash flow but also transforming into a more competitive organization (Kolev, 2016;Konara and Ganotakis, 2020). The stewardship and resource-based view theories posit that divestiture strategy is a defensive choice for a firm to improve the performance (John and Ofek, 1995;Lang et al, 1994;Kolev, 2016).…”

Section: Introductionmentioning

confidence: 99%

Divestiture strategy, CEO power and firm performance

You

Yong

2020

MRR

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Purpose This study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the relationship under the agency and power circulation theories. Design/methodology/approach This study focuses on a sample of 319 non-financial public-listed companies in Malaysia from the year 2012–2016 and estimates the model under two-step generalized method of moments panel regression to eliminate the endogeneity issue. Findings The results show that divestiture strategy decreased the firm performance. Meanwhile, greater CEO power changed that divestiture effect but still failed to increase the performance. This study also indicates the CEO power strengthens the relationship between firm performance and divestiture. Research limitations/implications The overall findings show that the positive moderating role of CEO power on the relationship between divestiture and performance. This research confirmed the agency and power circulation theories by showing that CEO power can make divestiture strategy works. However, the moderating plot tells different. CEO power may strengthen the relationship between divestiture and performance; it fails to boost up the performance in overall. Therefore, this study is about CEO power on the strategic decision and gives a good implication for corporate governance concerning the impact of CEO power on the organization’s alignment process. Originality/value This study examines the effect of CEO power on the performance of divestiture strategy implementation by contesting the agency and power circulation theories within an emerging country context.

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Firm-specific resources and foreign divestments via selloffs: Value is in the eye of the beholder

Cited by 42 publications

References 105 publications

Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

The Impact of Environmental Sustainability and Financial Resources Utilization on Firm Financial Performance: The Mediating Role of Leadership Styles

Divestiture strategy, CEO power and firm performance

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