This dissertation is an investigation of the nature of voluntary corporate restructuring during the period 1971 through 1987. Voluntary restructurings are those types of reorganization where management provides the impetus for the change. In contrast, involuntary restructurings, for example hostile tender offers and leveraged buyouts, are those where an outside party takes an active interest in acquiring the firm. In the sample investigated, it is found that the wealth effect of voluntary restructuring is approximately seven times that of involuntary restructuring. / Two tests are performed: an ex ante test and an ex post test. The purpose of the ex ante test is to document the existence of a restructuring premium and to identify some of the discriminating characteristics of potential self restructuring candidates. The takeover or privatization of a major corporation creates an industry disturbance that results in an indirect threat of takeover for the remaining firms within the same industry. This activity provides the incentive for firms to self restructure. In anticipation of these reorganizations, the market provides a restructuring premium to those firms that it believes has the need, willingness, and ability to reorganize. / Statistically significant, cumulative, abnormal returns of 15% are found to occur over a three year period. Further, these restructuring premiums are found to be greater during the 1980s than during the 1970s. Results indicate that the firms most likely to self restructure are characterized as being large, low risk, older companies with below-average debt/equity ratios. / The ex post test is performed to determine the relative effectiveness of certain organizational strategies. It is found that firms that voluntarily restructured via downsizing (i.e., reducing both assets and debt) and controlling overhead expenses were more successful than firms that did not. In addition, results indicate that companies during the 1980s and those with lower risk were the most lily to reorganize. / Source: Dissertation Abstracts International, Volume: 51-07, Section: A, page: 2475. / Major Professor: James S. Ang. / Thesis (Ph.D.)--The Florida State University, 1990.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_78277 |
| Contributors | Speltz, John E., Florida State University |
| Source Sets | Florida State University |
| Language | English |
| Detected Language | English |
| Type | Text |
| Format | 177 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
Page generated in 0.0011 seconds