Furrer, Olivier, Pandian, J. Rajendran and Thomas, Howard (2007) Corporate strategy and shareholder value during decline and turnaround. MANAGEMENT DECISION, 45 (3). pp. 372-392. ISSN 0025-1747

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Abstract

Purpose - The paper aims to assess the impact of corporate strategy on shareholder value in decline and turnaround situations. Design/methodology/approach - A sample of 45 turnaround firms was selected and matched against a control sample which did not face continuous decline over the time period studied. The impact of corporate strategy on shareholder value was tested using cumulative beta excess return measures to capture the long-term basis of corporate strategy. Findings - The paper finds that the beta excess return measures captured the hypothesized relationships between strategy and shareholder value for the sample firms studied. Practical implications - Beta excess return measures are superior to case studies or event studies for identifying the long-term effects of corporate strategy. Originality/value - Relatively few studies have compared the strategies of turnaround firms with a matched sample of non-declining firms. The use of cumulative beta excess returns to assess long-term valuation of corporate strategy is original.

Item Type:	Journal Item
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Journal or Publication Title:	MANAGEMENT DECISION
Publisher:	EMERALD GROUP PUBLISHING LIMITED
ISSN:	0025-1747
Date:	2007
Volume:	45
Number:	3
Number of Pages:	21
Page Range:	pp. 372-392
Identification Number:	10.1108/00251740710745025
Publication Status:	Published
URI:	http://wrap.warwick.ac.uk/id/eprint/31708

Data sourced from Thomson Reuters' Web of Knowledge

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