Management Papers
Document Type
Journal Article
Date of this Version
10-2016
Publication Source
Academy of Management Journal
Volume
59
Issue
5
Start Page
1754
Last Page
1776
DOI
10.5465/amj.2013.0552
Abstract
This paper investigates how “dual directors” enable firms that undertake corporate spinoffs to manage their post-spinoff relationships with the firms they divest, as well as the performance implications of dual directors serving simultaneously on these companies’ boards. While the presence of dual directors is positively associated with the average stock market returns of parent and spinoff firms, their presence is also increasingly positively associated with parent firm performance, but increasingly negatively associated with spinoff firm performance as the share of sales a spinoff firm makes to its parent firm rises. These findings show that, while dual directors give a parent firm power over its spinoff firm, dual directors only exercise that power at the spinoff firm’s expense when that company is highly dependent on its parent firm.
Copyright/Permission Statement
Originally published in the Academy of Management Journal © 2016 Academy of Management
This is a pre-publication version. The final version is available at http://dx.doi.org/10.5465/amj.2013.0552
Keywords
dual directors, corporate spinoffs, governance, power, transaction cost economics, resource dependence theory
Recommended Citation
Feldman, E. R. (2016). Dual Directors and the Governance of Corporate Spinoffs. Academy of Management Journal, 59 (5), 1754-1776. http://dx.doi.org/10.5465/amj.2013.0552
Included in
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Date Posted: 25 October 2018
This document has been peer reviewed.