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Together, these studies suggest that managers may proactively undertake divestitures (or specific types of divestitures) to clarify how their firms are perceived by relevant external constituents, extending beyond the idea that divestitures simply reduce information asymmetry in diversified firms.
Research on divestitures generally seeks to address two key questions: what motivates firms to undertake divestitures (or certain types of divestitures), and what are the implications of divestitures for performance?
One is that it underscores the need for scholars who are conducting empirical studies of divestitures to use statistical methodologies that account for the effects of non-random selection in the firms that choose to undertake divestitures (or certain types of divestitures).
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Having presented the general types of research questions that empirical studies about divestitures can usefully set out to answer, it is next helpful to describe the settings in which these questions can be addressed, as well as the operationalization of key constructs.
Since then, it has been a whirlwind of divestitures and acquisitions for Kraft.
The success of divestitures doesn't mean that mergers are always a mistake.
But a pure hell or high water, which requires any amount of divestitures (even the whole company), is rare.
Emilie Feldman, an assistant professor of management at Wharton who has done a series of studies of divestitures, told me, "It isn't just the stock price.
The one-year process of divestitures has clipped a third from revenues.
He began a one-year process of divestitures that has clipped a third from revenues.
As will now be explained in greater detail, these pieces of information can respectively be used to calculate the returns to divestiture announcements and to identify the post-divestiture years over which the performance implications of divestitures might manifest themselves.
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