Corporate Restructuring and Performance Enhancing Equation: Evidence from UK Non – Financial Firms

Samwel Marwa Werema

Abstract


This paper examines performance changes following corporate restructuring using an event study methodology that employs accounting-based measures of operating performance where a sample of UK non-financial firms that announced different forms of corporate restructuring during 1993-2000 is used for an analysis. The analysis finds that there is an improvement in firm performance, financial health, and firms are more focused following restructuring. Moreover, firms increase investment, efficiency and were able to cut costs over the period following corporate restructuring.


Keywords


Corporate Restructuring; Poor Performance; Financial Leverage; Corporate Diversification; Asset Sales; Dividend Cuts; Layoffs; and CEO Turnover.

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References


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