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Author: Philipp Otto
Publisher:
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Languages : en
Pages :
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Book Description
Whereas a number of studies examined the effects of divestitures on parent performance and shareholder wealth, the performance of the divested unit was devoted only little attention in the extant literature. In contrast, the focus of this study is to examine the post-divestiture performance of spin-offs and to identify potentially performance influencing factors. For this reason, various financial performance ratios of a sample of 138 spin-offs that occurred from 1996 till 2007 are tracked for a 3-year period. The results obtained indicate a slight deterioration in the unit's return on assets and asset turnover, reflecting a strongly growing asset base following the divestiture. In particular, this deterioration was observed for previously unrelated units. Moreover, the subsidiary's post-divestiture performance seems to be influenced by liquidity and market based measures. Apart from that, no significant impact on performance was observed.
Author: Philipp Otto
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Whereas a number of studies examined the effects of divestitures on parent performance and shareholder wealth, the performance of the divested unit was devoted only little attention in the extant literature. In contrast, the focus of this study is to examine the post-divestiture performance of spin-offs and to identify potentially performance influencing factors. For this reason, various financial performance ratios of a sample of 138 spin-offs that occurred from 1996 till 2007 are tracked for a 3-year period. The results obtained indicate a slight deterioration in the unit's return on assets and asset turnover, reflecting a strongly growing asset base following the divestiture. In particular, this deterioration was observed for previously unrelated units. Moreover, the subsidiary's post-divestiture performance seems to be influenced by liquidity and market based measures. Apart from that, no significant impact on performance was observed.
Author: Thomas J. Chemmanur
Publisher:
ISBN:
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Languages : en
Pages : 51
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Book Description
We develop a new rationale for the performance and value improvements of firms following corporate spin-offs. We consider a situation of a firm with multiple divisions, where incumbent management may have differing abilities for managing various divisions. Giving up control to a rival with better ability in managing the firm, while it benefits equity holders (including incumbent management) by increasing the firm's equity market value, also involves losing the incumbent's benefits from control. Due to this trade-off, the incumbent, while willing to relinquish control to extremely high ability rivals, may not wish to do so for rivals who have only moderately higher management ability relative to him. Spin-offs increase the chance of loss of control to potential rivals in two ways: First, it reduces the ability of the incumbent to use firm size strategically against the rival in a control contest (after the spin-off, the rival can invest to the full extent of his wealth in the equity of the firm more vulnerable to a takeover). Second, it increases the probability that passive investors will vote with the rival in a contest for control for at least one division (in a joint firm, the superior management ability of any rival with respect to one division may be neutralized by inferior ability with respect to another one). This increased chance of loss of control following a spin-off, in turn, motivates the incumbent to work harder (despite his disutility for effort) in equilibrium in an attempt to maintain control. Thus, the increase in equity market value of the firm upon spin-off announcements arises not only from market participants incorporating in their valuations the increased probability of a takeover by a more able rival for control, but also from their anticipating the increase in managerial efficiency arising from the disciplining effect of the spin-off on firm management. Our analysis predicts that, in addition to positive announcement effects, the equity of a sample of spun-off firms will also exhibit long-term positive abnormal returns under certain conditions. Our model also explains a wide variety of other recently documented empirical regularities, and provides hypotheses for further empirical work.
Author: Matthew Briggs Semadeni
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Languages : en
Pages :
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This research examines the exit of a subsidiary from its corporate parent through spin-off, the actions taken by the firm management post spin-off, and the performance implications of those actions, all from the spin-off's perspective. While spin-off announcements are generally met with a positive stock market reaction, what occurs post spin-off remains largely unexamined, with performance predictions regarding spin-off firms often being equivocal. This raises questions as to what generates positive performance for spin-off firms, with agency, transaction cost, and upper echelons theories offering differing, and sometimes conflicting, predictions. By integrating these theoretical perspectives, a model of managerial action and its performance implications is presented. The model examines how the formation of new top management, the establishment of managerial monitoring and incentives, and the severance effects from leaving the corporate structure affect strategic, financial, and institutional actions, and how these actions affect performance. The theory and hypotheses developed in this research are empirically tested on a sample of 176 corporate spin-offs completed by publicly traded firms between 1986 and 1997. Results for the action-based models indicate that background of the CEO or the TMT, as well as CEO options, had no effect on actions. CEO and TMT ownership had opposite effects on financial actions, with TMT ownership increasing the likelihood of strategic actions and CEO ownership increasing the likelihood of institutional actions. Ownership by the parent firm and monitoring by officers of the parent serving as board members had no effect on the likelihood of actions, although having a chairman of the board from the parent decreased the likelihood of strategic actions. Finally, severance effects had limited influence on the actions taken post spin-off. Results for the performance-based models indicate that strategic actions were negatively related to ROA, while financial and institutional actions are positively related to ROA and institutional actions are positively related to market performance. In general, inaction was related to lower Tobin's q, with the signs of the coefficients for the other performance models negative, but not significant. Finally, the spin-off firm's relationship with its corporate parent had limited effect on the link between actions and performance.
Author: Carolyn Y. Woo
Publisher:
ISBN:
Category :
Languages : en
Pages : 54
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Author: Guido Bünstorf
Publisher:
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Category :
Languages : de
Pages : 453
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Author: Alistair M. Brett
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 346
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Book Description
University-based research is increasingly leading to business opportunities beyond academia. Notable examples include Hewlett Packard from Stanford University and Digital Equipment Corp. from MIT. This volume explores this emerging phenomenon in order to offer an efficient solution to the problem of launching academic ventures. The 14 contributions to University Spin-off Companies provide an overview of the opportunities in and obstacles to creating spin-off ventures and consider case studies from several universities. The contributors believe that greater emphasis on spin-off ventures will allow the nation's universities to play a vital role in increasing industrial competitiveness, creating wealth for the community, providing greater returns on our investment in higher education and enhancing the traditional knowledge-generating role of the university sector.
Author: Marius Tuft Mathisen
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The literature examining university spin-offs is expanding rapidly. While most studies have examined the antecedents of spin-off creation at universities, the impact of spin-offs commercializing university research cannot be properly assessed without considering how these firms develop, grow, and perform over time. This study provides a systematic review of a recent research stream addressing the development, growth, and performance of university spin-offs. By critically analyzing 105 research papers published since 2000, this paper makes two main contributions. First, we present a conceptual framework outlining the variety of outcomes used in the literature to assess the development, growth and performance of university spin-offs, as well as the determinants of these outcomes at different levels of analysis. Second, we critically assess gaps in the extant literature and discuss promising directions for future research. We conclude that the university spin-off phenomenon provides an excellent empirical context for conducting research that contributes to more general theoretical discussions related to entrepreneurship, innovation and management.
Author: Rigo Tietz
Publisher: Springer Science & Business Media
ISBN: 3658012153
Category : Business & Economics
Languages : en
Pages : 307
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Book Description
Research-based spin-off companies are a special subgroup of new technology-based ventures and play an important role for innovation and economic development. Executive teams of academic spin-offs face several challenges in building up sustainable and profitable ventures, because they often lack managerial and entrepreneurial skills. Based on a quantitative analysis of 193 German spin-offs RigoTietz examines the relationships between executive team characteristics, strategic decision making, and firm performance. The study contributes to the entrepreneurship and strategic management literature and has practical implications for entrepreneurs and managers, policymakers and practitioners of start-up initiatives and technology transfer organisations.
Author: Manoj Gupte
Publisher: Springer Science & Business Media
ISBN: 3835096419
Category : Business & Economics
Languages : en
Pages : 270
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Book Description
Drawing on a database of 107 university spin-offs whose founders participated in structured face-to-face interviews, Manoj A. Gupte analyzes how the management of university spin-offs can overcome the dilemma of resource poverty. He shows that the success of spin-offs can be actively influenced through network activities by accessing critical resources external to the company.
Author: Scott Andrew Shane
Publisher: Edward Elgar Publishing
ISBN: 1843769824
Category : Business & Economics
Languages : en
Pages : 348
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Book Description
"Authoritative and highly readable, this volume will appeal to scholars researching the spinoff phenomenon, university technology transfer officers, inventors, policymakers, external entrepreneurs and investors."--BOOK JACKET.
