Investigating the Variables to Corporate Asset Downsizing and Post-Downsizing Performance
Date Issued
2006
Date
2006
Author(s)
Huang, Yi-Chun
DOI
zh-TW
Abstract
This thesis investigates the asset downsizings of 93 US corporations that substantially downsized their assets during the period of 1993-2001. The result is consistent with the notion that the decisions to downsize follow a sustained period of poor operating performance, and tend to occur in financially high levered firms with high level of diversification in operation as well as in geography. Further to the finding is that downsizing seems to be a strategy in response to industry depression. Sample firms experience significant improvement in operating performance, lower debt ratio, and condensed operating and geographic segments following the downsizing. As for the use of proceeds from downsizings, 58 sample firms use the proceeds to repay debt, 14 firms purchase treasury stocks, and 48 firms make up for cash shortage of operating activities. Firms with debt repayment tend to have the best operating performance among all the firms with other uses of proceeds, and sensitivity analysis indicates that it is not mean reversion in earnings. Sample firms financing the cash shortage of operating activities with the proceeds perform the worst, which implies the difficulty to improve efficiency of operating activities in a short period of time.
Subjects
縮小規模
重整活動
營運表現
多角化
財務槓桿
Downsizing
Corporate Restructuring
Operating Performance
Diversification
Financial Leverage
Type
thesis
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