Empirical evidence of the parent company's influence on spin-off: from creation to performance

Isabel Oliveira (), Jorge Figueiredo, António Cardoso and Maria Nascimento Cunha
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Isabel Oliveira: Lusiada University
Jorge Figueiredo: Lusiada University
António Cardoso: University Fernando Pessoa
Maria Nascimento Cunha: University of Algarve

International Review of Economics, 2023, vol. 70, issue 3, No 5, 379-394

Abstract: Abstract Companies to adapt to today's society, characterized by continuous changes, adopt strategies to search for new opportunities, sometimes emerging business models, different from the parent company's business area. If they do not want to diversify their core business, they choose to create a new company that will be independent from the parent company, the spin-off. The aim of this study is to analyze and analyze the parent company's influence on spin-off performance, in terms of motivating factors for creation, transferred resources, relationship type and spin-off performance in the post-spin-off period. To achieve this objective, 31 surveys were analyzed, answered by workers who occupy management positions in spin-off companies in the USA and Canada. The statistical analysis of the data suggests that the concentration of the business area and the maximization of shareholder value are the main reasons for the creation of the spin-off. The most mentioned spin-off challenges are aggressive competition and efficient allocation of efficient resources. One of the characteristics of the spin-off is that it is an independent company, a fact that is not verified in the sample under analysis. However, the spin-off's performance does not change when it becomes independent.

Keywords: Spin-off; Parent company; Resources; Performance (search for similar items in EconPapers)
JEL-codes: D25 L25 M13 O32 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s12232-023-00423-w

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