To Divest or not to Divest: A Meta‐Analysis of the Antecedents of Corporate Divestitures

Kolev, Kalin D.

doi:10.1111/1467-8551.12145

Cited by 68 publications

(84 citation statements)

References 105 publications

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“…To address the issue of endogeneity, the instrument variable (IV) approach is used (Baum, ). Marketing capabilities are suggested to be among the most important factors that directly influence FA performance (Morgan, Vorhies, & Mason, ), but they usually do not have a direct impact on an FA's exit (Kolev, ). Therefore, we chose two of the marketing capabilities, promotion capability and distribution capabilities, as our two IVs.…”

Section: Methodsmentioning

confidence: 99%

Performance and business relatedness as drivers of exit decision: A study of MNCs from an emerging country

Tan

Sousa

2017

Global Strategy Journal

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Research Summary This study examines the exit behavior of emerging market MNCs in the context of the parent company (PC)‐foreign affiliate (FA) relationship. Specifically, we consider business relatedness as a moderating variable and examine its impact on the relationship between an FA’s international performance and its exit decision from a foreign market. Our results, based on data collected from multiple informants in 180 Chinese firms, indicate that product relatedness and intangible resource relatedness have different moderating impacts on the FA performance‐FA exit decision relationship. Implications of these findings, along with the limitations of the study, are discussed. Managerial Summary Although the research on international entry and expansion is particularly important, an aspect that has been largely ignored in the literature is the exit behavior of firms. This study examines whether the extent to which a foreign subsidiary is similar to its parent's core business may influence the firm's exit decision. The findings indicate that managers are more likely to exit a poorly performing FA if there is a high (vs. low) level of product relatedness between the FA and its PC's core business. The results also suggest that intangible resource relatedness exerts a different contingent effect on the FA performance‐FA exit relationship than does product relatedness.

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Section: Methodsmentioning

confidence: 99%

Performance and business relatedness as drivers of exit decision: A study of MNCs from an emerging country

Tan

Sousa

2017

Global Strategy Journal

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“…We controlled for several factors linked to divesting firm financial performance (Bergh, 2017; Kolev, 2016; Lee and Madhavan, 2010). First, a considerable research stream reports that the stock market assessment of a divestiture is associated with the relatedness of the divested business to the primary business of the divesting firm (see Brauer, 2006; Lee and Madhavan, 2010, for reviews; e.g.…”

Section: Methodsmentioning

confidence: 99%

Market response to divestiture announcements: A screening theory perspective

Bergh

Peruffo

Chiu

et al. 2019

Strategic Organization

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Capital market investors have limited information about the motives, exchange terms, and expected outcomes of corporate divestitures. Thus, when a firm announces a divestiture, capital markets may have difficulty distinguishing divestitures that are likely to be beneficial and investment worthy from those that signify hidden problems. Drawing on screening theory, we argue that one way investors might overcome their information disadvantages is to use screens to identify investment-worthy divesting firms. We test this logic using one such screen: change in blockholding equity stakes prior to a divestiture announcement. Data from 858 European Union divestitures occurring in 13 Western European Countries show that investors’ reaction to a divestiture announcement is positively associated with pre-divestiture changes in blockholdings in the divesting firm. Furthermore, investors’ valuations were more positive in higher performing divesting firms that had increases in blockholding equity stakes before the divestiture than those that had reductions in these owners’ equity stakes. The findings extend our understanding of how outsiders, such as investors, navigate incomplete information about divestitures. We describe how our study offers a range of implications for divestiture research.

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“…Whereas the I 2 index describes the percentage of variability that is due to heterogeneity rather than to sampling error, the H 2 index is calculated as the ratio of the unaccounted-for variability in effect size to the level of sampling variability (Borenstein et al, 2009). Some authors even recommend using several different methods to triangulate heterogeneity analyses to detect the presence of moderating effects (Kepes et al, 2012(Kepes et al, , 2013 The difficulties to perform any of these heterogeneity analyses can be found for instance in the MA Kolev (2016) performed on the relationship between several variables and divestitures. He only tested heterogeneity by means of overlapping in confidence intervals to subgroups and he followed the H&S approach.…”

Section: Ma In Management: Main Differences With Clinical Researchmentioning

confidence: 99%

Meta-analyses in management: What can we learn from clinical research?

Sartal

González‐Loureiro

Vázquez

2020

BRQ Business Research Quarterly

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We analyze the weaknesses of meta-analyses (MAs) in management research using as benchmark a scientific field where this technique shows a longer tradition: clinical research. We suggest four areas in which management research MA practices should improve: (1) availability of information and replicability of primary research, (2) correct application of statistical support, (3) execution of heterogeneity analyses, and (4) standardization of result reporting. Using a representative MA on an operations management topic, we identify qualitatively the aspects to be improved at each stage. We show the different results that could have been achieved by following standard procedures in clinical research, incorporating different “good practices” from this research field. Overall, these recommendations aim at improving the transparency and replicability of MAs, which can not only facilitate the accumulation of scientific knowledge but also intensify the dialogue between academia and practitioners. JEL CLASSIFICATION: C01; M11; M1

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To Divest or not to Divest: A Meta‐Analysis of the Antecedents of Corporate Divestitures

Cited by 68 publications

References 105 publications

Performance and business relatedness as drivers of exit decision: A study of MNCs from an emerging country

Performance and business relatedness as drivers of exit decision: A study of MNCs from an emerging country

Market response to divestiture announcements: A screening theory perspective

Meta-analyses in management: What can we learn from clinical research?

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