• DOI:10.2139/ssrn.363060
Corpus ID: 15629031

Divestitures and Divisional Investment Policies

@article{Dittmar2002DivestituresAD,
  title={Divestitures and Divisional Investment Policies},
  author={A. Dittmar and A. Shivdasani},
  journal={IO: Firm Structure},
  year={2002}
}

A. Dittmar, A. Shivdasani

Published 2002

Business

IO: Firm Structure

We study a sample of diversified firms that alter their organizational structure by divesting a business segment. These firms experience a reduction in the diversification discount after the divestiture. We show that the efficiency of segment investment increases substantially following the divestiture and that this improvement is associated with a decrease in the diversification discount. Our results support the corporate focus and financing hypotheses for corporate divestitures. We… CONTINUE READING

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