Thirty Years After Michael E. Porter: What Do We Know About Business Exit?

Although a business exit is an important corporate change initiative, the buyer’s side seems to be more appealing to management researchers than the seller’s because acquisitions imply growth, i.e., success. Yet from an optimistic viewpoint, business exit can effectively create value for the selling company. In this paper we attempt to bring the relevance of the seller’s side back into our consciousness by asking: What do we know about business exit? We start our exploration with Porter (1976), focusing on literature that investigates the antecedents of, barriers to, and outcomes of business exit. We also include studies from related fields such as finance and economics.1 Through this research we determine three clusters of findings: factors promoting business exit, exit barriers, and exit outcomes. Overall, it is the intention of this paper to highlight the importance of business exit for research and practice. Knowing what we know about business exits and their high financial value we should bear in mind that exit need not mean failure but a new beginning for a corporation

Firm-size distribution and price-cost margins in Dutch manufacturing

Industrial economists surmise a relation between the size distribution of firms and performance. Usually, attention is focused on the high end of the size distribution. The widely used 4-firm seller concentration, C4, ignores what happens at the low end of the size distribution. An investigation is presented of the extent to which the level and the growth of small business presence influence price-cost margins in Dutch manufacturing. A large data set of 66 industries for a 13-year period is used. This allows the investigation of both small business influences within a framework in which that of many other market structure variables is also studied. Evidence is shown that price-cost margins are influenced by large firm dominance, growth in small business presence, capital intensity, business cycle, international trade, and buyer concentration

The Effects of Cost and Asset Retrenchment on Firm Performance: The Overlooked Role of a Firm’s Competitive Environment

When firms face declining financial performance, research suggests that cost and asset retrenchment can lead to improved performance among poorly performing firms. However, previous studies have largely focused on firms operating in mature industries. This research develops and tests arguments that cost and/or asset retrenchment strategies will have different effects on firm performance in competitive environments characterized as growing and declining. In growth industries, asset retrenchment was positively related to performance improvement while cost retrenchment was unrelated. In declining industries, cost retrenchment was positively related to improved performance while asset retrenchment had a negative effect on firm performance. Implications of these findings for turnaround strategies are discussed.Yeshttps://us.sagepub.com/en-us/nam/manuscript-submission-guideline

Pension reform, the stock market, capital formation and economic growth: a critical commentary on the World Bank's proposals

Abstract Proposing far-reaching reforms to the pension systems, the World Bank has recently suggested that the existing pay-as-you-go pension systems in many rich as well as poor countries, should be replaced by fully funded, mandatory, preferably private pensions, as the main pillars of the new system. It argues that these reforms will not only benefit the pensioners, but also enhance savings, promote capital formation and economic development. This paper provides a critical examination of the Bank's theses and concludes that it has adopted a one-sided view of the relationships between the key critical variables. The proposed reform may therefore neither protect the old nor achieve faster economic growth