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

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  • Erl, Ludwig
  • Kiesel, Florian
  • Koenigsmarck, Markus
  • Schiereck, Dirk

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.

Suggested Citation

  • Erl, Ludwig & Kiesel, Florian & Koenigsmarck, Markus & Schiereck, Dirk, 2023. "Performance effects of sell-offs and the role of sell-off experience," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 244-257.
    • Handle: RePEc:eee:quaeco:v:88:y:2023:i:c:p:244-257
    DOI: 10.1016/j.qref.2023.01.008
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