Success Factors of Corporate Spin-Offs

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Springer, Mar 4, 2005 - Business & Economics - 257 pages
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Corporate Spin-Offs are highly successful phenomena that produce important impacts on their economic environment. However, existing investigation only delivers partial explanations as it takes into account a too small number of single factors and uses research approaches focused on narrow aspects. The present work has been undertaken in order to investigate the individual contributions of a wide range of factors on the Corporate Spin-Off decision and its success, the intluence of the interrelation of the factors and the existence of typologies. The tirst chapter presents a revision of existing detinitions and establishes a general typology. It highlights tive main topics: value creation, Corporate Spin-Off policy, framework conditions, the relationship between parent and Spin-Off, and characteristics and effects of Corporate Spin-Offs. The characteristics of Spin-Offs reveal that Spin-Offs play an important role in new tirm creation and combine the high growth of new companies with considerably lower failure rates. The positive impacts of Corporate Spin-Offs on competitiveness and employment and their economic environment in general stand out. The tirst chapter tinishes with the development of a detinition as a basis for this investigation. Chapter number two presents the factors that affect Corporate Spin-Off processes, distinguishing between seventeen factors from previous literature and four new factors. These factors are used in order to establish relations with the Spin-Off decision and the success of the process Chapter three provides an overview of the models applied in previous Corporate Spin-Off research. By applying univariate models, the tirst Spin-Off studies related excess retums in stock prices to the Spin-Off announcement (event date analysis). Multivariate models appeared more recently, both as independent models and in combination with event date analysis or other multivariate statistics. The nine steps of analysis proposed for this investigation comprise a wide range of statistical models, namely cluster analysis, principal component analysis, linear and logit regression, and discriminant analysis. The construction of these models and the variables considered are also presented. This chapter tinishes with a description of the degree ofnovelty of the approach chosen here and the expected contribution to science. The fourth chapter shows the development of the questionnaire, revealing how the factors were formulated in the questionnaire and describing the development and operationalisation of the success dimensions. The sampling population consisted of 4.158 companies in high-technology sectors and in cost-cutting sectors in twelve European countries. A total of 211 companies responded to the questionnaire. In the tifth chapter, the results of this investigation are analysed. First, descriptive statistics of the responses to the questionnaire are shown. Then, "bottom-up typologies" are established and the motives for the Spin-Off decision analysed. After this, the success dimensions are reduced through principal component analysis and the importance of the single Spin-Off factors is analysed. "Top-down typologies" are established at the end. Chapter number six presents a synthesis and the conclusions of this work. It details the contributions to the research questions. In addition, future research needs are identitied.

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