Resumen de Corporate restructuring and product market behaviour

Yilei Zhang, Song Wang

• This article investigates the relationship between product market behaviour and corporate restructuring policies. We focus on two types of corporate restructuring events: acquisitions and divestitures. We find that 1 year after acquisition, acquiring firms on average experience long-term deteriorating product market performance. In addition, acquiring firms in industries with less competition have worse performance in subsequent years. In comparison, divesting firms experience no significant change in the performance after divestitures. Last, we document that a sustainable product market improvement is related to higher stock market valuation while a temporary improvement have negative effects. Therefore, we show that corporate restructuring has an important firm-value implication through the channel of product market effects.