Causes and Effects of Corporate Refocusing
Author | : Philip G. Berger |
Publisher | : |
Total Pages | : |
Release | : 1998 |
ISBN-10 | : OCLC:1291270681 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Causes and Effects of Corporate Refocusing written by Philip G. Berger and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the precursors and outcomes of refocusing episodes by 107 diversified firms that were not taken over between 1984 and 1993. These firms had more value-reducing diversification policies than diversified firms that did not refocus. However, major disciplinary or incentive-altering events (including management turnover, outside shareholder pressure, changes in management compensation, and financial distress) usually occurred before refocusing took place. The cumulative abnormal returns over a firm's refocusing-related announcements averaged 7.3%, and were significantly related to the amount of value-reduction associated with the refocuser's diversification policy.