The partial or complete disposal of a whole company, a segment, a division, a business unit or an asset. Can be conducted through various legal forms such as downgrading, closure, sell-off, spin-off, spin-out, equity carve-out, split-off, split-up, leveraged buyout, management buyout.
Published in Chapter:
The Evolution of Corporate Divestment: Towards a New Research Paradigm?
Pedro Miguel Freitas da Silva (University of Aveiro, Portugal) and António Carrizo Moreira (University of Aveiro, Portugal)
Copyright: © 2019
|Pages: 25
DOI: 10.4018/978-1-5225-6301-3.ch015
Abstract
When compared to other fields of research such as mergers and acquisitions, corporate divestment is under researched. There are at least three main reasons for this: the environment in which corporate divestment research has taken place has caused divestments to be understood as acquisition-driven rather than strategy-driven, the scope and distinct modes of divestment, and the difficulties in isolating the divestment phenomena. The objective of this chapter is to review the main theoretical approaches used in the study of divestment, to analyze their contribution to the field, and to discuss whether new approaches are needed in divestment research. Most studies of divestment are based on the concept that divestment is the outcome of poor unit performance, and the reversal of previous over-diversification and growth strategies that expanded the company size beyond optimal control. This chapter proposes four future lines of research into corporate divestment: the international business strategy, the network perspective, the stakeholders' perspective, and the institutional theory.