Market Performance of Spun-Off Subsidiaries: Effects of Board Independence and Directors’ Industry Experience

The goal of corporate spin-offs, as a restructuring technique, is to create better value for both the divesting firm and its subsidiary/ division. These transactions lead creation independent, publicly traded entities, which are called spun-off subsidiaries. In this study, we examine effect board independence directors’ industry experience on market performance subsidiaries by setting two main hypotheses. Our sample includes 123 completed U.S.-based spin-off events during 14-year long time frame. According our empirical analysis, find support hypotheses, appear be significant positive. addition, moderation analysis shows that interaction ownership positive significant. Based arguments agency resource dependence theories, study contributes governance literature proving importance directors (namely, their experience) after being separated from parents. From managerial contributions aspect, tells us if independent with same experience, these will change in performance. also members offered more shares top stronger.