The roles of closure and selloff in corporate restructuring

Ushijima, Tatsuo; Iriyama, Akie

doi:10.1016/j.jjie.2015.05.007

Cited by 3 publications

(8 citation statements)

References 37 publications

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“…In changing economic and environmental conditions, a firm may also want to sell assets and use proceeds to reverse its investment mistakes or to meet new opportunities (Hwa 2003;Hovakimian & Titman, 2006;Ushijima & Iriyama, 2015). Desai and Gupta (2019) found evidence that firms prefer to finance their investment opportunities by selling assets instead of issuing new securities when the financing need is a smaller amount.…”

Section: Organizational Restructuringmentioning

confidence: 99%

The Impact of Tangible Asset Sales on Stock Returns: A Research on Manufacturing Companies Listed in Borsa Istanbul

Soylu¹

2020

berj

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Nowadays, due to economic fluctuations, increasing competition and technological development companies need to continuously and rapidly adapt to changing business environment. Furthermore, internal conditions like financial distress or strategy changing make the restructuring inevitable for companies. Within this frame, tangible assets sales might have an effect on firm value both by generating a source of financing and allowing companies to optimize their asset structure. In this study, the impact of tangible assets sales on stock returns of manufacturing companies listed on Borsa Istanbul was examined for the period of January, 2016-December, 2017 using event study method. The empirical results show significant positive average abnormal returns associated with the asset sales on announcement day.

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Section: Organizational Restructuringmentioning

confidence: 99%

The Impact of Tangible Asset Sales on Stock Returns: A Research on Manufacturing Companies Listed in Borsa Istanbul

Soylu¹

2020

berj

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“…Higher levels of ownership such as majority joint-ventures and fully-owned subsidiaries experience a lower likelihood of failure (Mata and Portugal, 2000). Ushijima and Iriyama (2015) conducted research in Japan and showed that sold units are typically joint-ventures, as these structures are more subjected to decision deadlocks between partner firms and they can be sold more easily.…”

Section: Bjm 143mentioning

confidence: 99%

“…Empirical evidence indicates that poor unit performance is one of the main drivers for divestment (Ushijima and Iriyama, 2015;Kolev, 2016;Berry, 2013;Ravenscraft and Scherer, 1991;Duhaime and Grant, 1984). Ravenscraft and Scherer (1991) argue that a unit's below average performance is the primary reason they are divested.…”

Section: Bjm 143mentioning

confidence: 99%

“…Complementary and linked units may become economically unprofitable but nevertheless unsuitable for shut-down because closure would lead to high immediate losses, as divesting them affects the sales and costs of other units (Porter, 1976). Units are easier to separate when they are less embedded in intra-firm production and resource sharing networks (Ushijima and Iriyama, 2015). Additional factors such as being an unrelated, a joint-venture or belonging to an industry where firms actively trade assets through M&A contribute to an asset's liquidity and probability of divestment (Schlingemann et al, 2002;Ushijima and Iriyama, 2015).…”

Section: Bjm 143mentioning

confidence: 99%

“…Units are easier to separate when they are less embedded in intra-firm production and resource sharing networks (Ushijima and Iriyama, 2015). Additional factors such as being an unrelated, a joint-venture or belonging to an industry where firms actively trade assets through M&A contribute to an asset's liquidity and probability of divestment (Schlingemann et al, 2002;Ushijima and Iriyama, 2015).…”

Section: Bjm 143mentioning

confidence: 99%

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A systematic review of the literature on industrial divestment

Silva

Moreira

2019

BJM

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Purpose The purpose of this paper is to review the existing research on industrial divestment in order to identify the reasons for it, the process whereby it is achieved, and the outcomes of industrial sell-offs and closures. The study reports the main findings that have gained acceptance in the literature, gaps in the research and potential directions for future research. Design/methodology/approach A three stage systematic literature review protocol was used to conduct this review. The results are organized according to an “Antecedents – Process – Outcomes” framework. Findings The traditional accounts of industrial divestment have been framed in terms of firms’ weak performance and over-diversification as antecedents to divestment, leading to corporate governance issues. However, the list of antecedents of industrial divestment is more extensive. There is no consensus over the impact of some factors on divestments, as is the case of firm and unit size. The results are not conclusive as to whether firm performance improves after divesting. Research limitations/implications Future research should analyze the relationship between the antecedents of investment and divestment. The divestment process is not well studied and more studies that engage in theory building are needed, namely, on primary data and examining the short-term and long-term impacts of divestment on performance. Practical implications This review offers a comprehensive synthesis of the antecedents, the process and outcomes of divestment through sell-offs and closures. Factors such as environmental conditions and the entry mode strategy are important in determining the divestment of subsidiaries. Divestments may be positively or negatively regarded by shareholders, depending on the context of the firm. Promoting managerial changes facilitates divestment. Originality/value This paper synthesizes knowledge of the main reasons as to why firms completely dispose of their assets, contributing to this under-researched field.

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