Title

A unified model of corporate acquisitions and divestitures: An incentive perspective

Keywords

Acquisitions; Agency; Divestitures; Unified model

Abstract

The purpose of this paper is to unify corporate acquisitions and divestitures (e.g., spin-offs, equity carve-outs and sell-offs) into a simple but comprehensive agency model where risk and managerial incentives interact to determine an optimal corporate governance and an incentive compensation scheme. Emphasizing human and nonhuman aspect of corporate assets, the model not only explains existing empirical evidence regarding contractual and organizational changes, but also suggests new perspective regarding firms' behavior around corporate acquisitions and divestitures. Thus, it attempts to reconcile between synergistic and agency viewpoints in the takeover literature and provides determining factors in choosing between spinoffs and equity carve-outs. © 1998 Kluwer Academic Publishers.

Publication Date

1-1-1998

Publication Title

Review of Quantitative Finance and Accounting

Volume

10

Issue

2

Number of Pages

127-154

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1023/A:1008267819853

Socpus ID

54649084451 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/54649084451

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