Restructuring Top Management: Evidence from Corporate Spinoffs
Dice Center Working Paper No. 2001-15
47 Pages Posted: 29 Oct 2001
Date Written: October 2001
There has been substantial research on both asset restructuring and top management changes. The connection between the two, however, has received little attention. Here, we examine spinoffs as events through which top management is restructured. Our main findings are: 1) both firm-specific human capital and more general human capital, such as governance expertise and top management experience, affect the composition of spinoff firms' top management, 2) the structure of spinoff top management is related to the value created by a spinoff, and 3) for a subsample of firms, spinoffs serve as a form of management dismissal, with the opportunity to manage a smaller, weaker spinoff firm serving as a "consolation prize."
JEL Classification: G32, G34, G14, L22, J44, J63
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