Measuring the Effect of Restructuring on Corporate Performance: The Case of Management Buyouts
Indiana University Dept. of Finance
Columbia University - School of Social Work
Recent research has attempted to document that the financial gains associated with takeovers, LBOs and other types of restructuring are attributable to subsequent improvements in operating performance. In this paper we develop a more general framework for measuring the effect of corporate restructuring on performance and apply the framework to a sample of firms taken private by their management. We demonstrate that the estimation approaches employed in the literature embody restrictions on the general framework which the data can reject. However, our best estimates provide evidence that MBOs improve corporate performance, and the magnitude of these improvements are similar to existing estimates.
JEL Classification: G10, G34working papers series
Date posted: September 7, 1999
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.281 seconds