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Projeto de investigação
Essays on Divestment: A Stakeholder Approach
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A systematic review of the literature on industrial divestment
Publication . Silva, Pedro; Moreira, Antonio
Purpose – The purpose of this paper is to review the existing research on industrial divestment in order to identify the reasons for it, the process whereby it is achieved, and the outcomes of industrial sell-offs and closures. The study reports the main findings that have gained acceptance in the literature, gaps in the research and potential directions for future research.
Design/methodology/approach – A three stage systematic literature review protocol was used to conduct this review. The results are organized according to an “Antecedents – Process – Outcomes” framework.
Findings – The traditional accounts of industrial divestment have been framed in terms of firms’ weak performance and over-diversification as antecedents to divestment, leading to corporate governance issues.
However, the list of antecedents of industrial divestment is more extensive. There is no consensus over the impact of some factors on divestments, as is the case of firm and unit size. The results are not conclusive as to whether firm performance improves after divesting.
Research limitations/implications – Future research should analyze the relationship between the antecedents of investment and divestment. The divestment process is not well studied and more studies that engage in theory building are needed, namely, on primary data and examining the short-term and long-term impacts of divestment on performance.
Practical implications – This review offers a comprehensive synthesis of the antecedents, the process and outcomes of divestment through sell-offs and closures. Factors such as environmental conditions and the entry mode strategy are important in determining the divestment of subsidiaries. Divestments may be positively or negatively regarded by shareholders, depending on the context of the firm. Promoting managerial changes facilitates divestment.
Originality/value – This paper synthesizes knowledge of the main reasons as to why firms completely dispose of their assets, contributing to this under-researched field.
Subsidiary survival: a case study from the Portuguese electronics industry
Publication . Silva, Pedro; Moreira, Antonio
Purpose – The existing literature suggests that multinational corporations (MNCs) divest subsidiary units whenever they cease to enjoy the advantages of ownership, location or internalization. However, not all MNCs divest under these conditions. This paper aims to explore the factors that contributed to the survival of a particular subsidiary and prevented it from being divested.
Design/methodology/approach – The analysis focuses on an individual subsidiary of a large foreign MNC in the electronics industry, which divested other subsidiaries from Portugal. Data were collected using semi-structured interviews.
Findings – The subsidiary’s diverse customer base, specificity and high level of efficiency, the local advantages, the existing governmental agreements and the parent MNC’s previous unsuccessful relocation experiences seem to have contributed to the survival of the subsidiary.
Research limitations/implications – Although the results of the case study are not generalizable to the entire population of firms, the featured case study is a rare survival success story in the Portuguese electronics industry.
Practical implications – The proposed framework may offer public authorities measures to create conditions to encourage firms to retain their investment in a particular site. For corporate strategists, new perspectives on subsidiary survival are provided.
Originality/value – This paper is one of the few qualitative studies in the field of subsidiary survival. The results offer an integrative framework on which factors contribute to the survival of a subsidiary located on a comparatively unfavorable labor cost location and support the role of the organizational learning and of previous failed relocation experiences and relocation barriers when a parentMNC decides whether to retain a unit.
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Fundação para a Ciência e a Tecnologia, I.P.
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Número da atribuição
SFRH/BD/115337/2016