Re. Hoskisson et al., CORPORATE DIVESTITURE INTENSITY IN RESTRUCTURING FIRMS - EFFECTS OF GOVERNANCE, STRATEGY, AND PERFORMANCE, Academy of Management journal, 37(5), 1994, pp. 1207-1251
Both inadequate governance and inappropriate strategy have been propos
ed as antecedents of the divestment activity of restructuring firms in
the 1980s. We combined both views in a structural equation model in w
hich divestment intensity is directly related to firm performance and
strategy, which are in turn preceded by weak governance. Some supporti
ve results indicate that blockholder equity, a governance antecedent,
and relative product diversification (strategy) have important indirec
t effects on divestment activity and that relative product diversifica
tion and relative debt have important direct effects. Unpredicted find
ings concerning board outsider equity and components of divestment int
ensity emerged. Also, market performance mediates the relationship bet
ween accounting performance and divestiture intensity.