Performance effects of sell-offs and the role of sell-off experience

Ludwig Erl, Florian Kiesel, Markus Koenigsmarck and Dirk Schiereck

The Quarterly Review of Economics and Finance, 2023, vol. 88, issue C, 244-257

Abstract: Divestitures are complex events undertaken for various motives and structured in multiple ways. This paper analyzes the long-term effects of sell-offs and sell-off experience on firm performance considering divestiture programs (divestitures using multiple sell-offs, having strategic intent and divestitures explicitly linked to a strategic reorientation). Our analysis reveals a positive effect of sell-offs structured as a divestiture program. However, the results suggest that in the context of such programs, potential learning transfers are outweighed by a negative performance associated with years of restructuring or inherent to firms undergoing a program. This paper contributes to the knowledge on performance effects of divestiture experience and provides evidence of the importance of programs.

Keywords: Divestitures; Sell-offs; Programs; Motives; Firm performance; Organizational learning (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:88:y:2023:i:c:p:244-257

DOI: 10.1016/j.qref.2023.01.008

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