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Corporate strategy and shareholder value during decline and turnaround
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Furrer, Olivier, Pandian, J. Rajendran and Thomas, Howard (2007) Corporate strategy and shareholder value during decline and turnaround. Management Decision, Volume 45 (Number 3). pp. 372-392. doi:10.1108/00251740710745025
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Official URL: http://dx.doi.org/10.1108/00251740710745025
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 |
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| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||
| Journal or Publication Title: | Management Decision | ||||
| Publisher: | Emerald Group Publishing Limited | ||||
| ISSN: | 0025-1747 | ||||
| Official Date: | 2007 | ||||
| Dates: |
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| Volume: | Volume 45 | ||||
| Number: | Number 3 | ||||
| Number of Pages: | 21 | ||||
| Page Range: | pp. 372-392 | ||||
| DOI: | 10.1108/00251740710745025 | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Restricted or Subscription Access |
Data sourced from Thomson Reuters' Web of Knowledge
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