The Illusion of Independence: Spun-Off Firms’ Risk-Taking as a Function of Status and Attachment to the Parent Firm

Medientyp: E-Book

Titel: The Illusion of Independence : Spun-Off Firms’ Risk-Taking as a Function of Status and Attachment to the Parent Firm

Beteiligte: Junge, Sebastian [VerfasserIn]; Graf-Vlachy, Lorenz [Sonstige Person, Familie und Körperschaft]; Mammen, Jan [Sonstige Person, Familie und Körperschaft]; Meinhardt, Ralf [Sonstige Person, Familie und Körperschaft]; Gudd, Christian [Sonstige Person, Familie und Körperschaft]

Erschienen: [S.l.]: SSRN, [2020]

Umfang: 1 Online-Ressource (44 p)

Sprache: Englisch

Entstehung:

Anmerkungen: In: Forthcoming in Long Range Planning
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 25, 2020 erstellt

Beschreibung: This paper examines the post-divestiture behavior of spun-off firms. Drawing on the spin-off literature and middle-status conformity theory, we argue that spun-off firms — as newly independent and publicly traded firms — tend to limit their risk-taking behavior to match the expectations of a crucial audience, i.e., security analysts. Following the logic of middle-status conformity theory, we hypothesize that firms with mid-level status are particularly susceptible to analysts' pressures, whereas high- and low-status firms are free to take greater risks. Crucially, however, we propose that this relationship is less pronounced for spun-off firms that are more attached to their parent firms, as formal and informal linkages between these two types of firms can endure beyond the separation and limit spun-off firms' independence. Using a dataset of 102 spin-off transactions occurring between 1995 and 2010, we find empirical support for a U-shaped relationship between spun-off firms' status and risk-taking. This relationship is attenuated when spun-off firms are more attached to their parents. We contribute to the spin-off literature by demonstrating that a spun-off firm's post-divestiture behavior is determined by the capital market audience's expectations and the attachment to the parent firm. In so doing, we also contribute to the literature on middle-status conformity theory by identifying a boundary condition of the theory. Additionally, we make a methodological contribution by combining ideas from the spin-off and institutional theory literature to develop a particularly comprehensive measure of attachment

Zugangsstatus: Freier Zugang

Nur in Feld suchen:

Zuletzt gesuchte Begriffe: