Divestiture of Foreign Subsidiaries for Deletion and Recombination: A Reconfiguration Viewpoint

This study develops a reconfiguration view of foreign subsidiary divestitures, arguing that multinational firms selectively implement divestitures for deletion (DD) and divestitures for recombination (DR) depending on the value of the divested operations and the viability of their redeployment. Instead of seeing divestitures as uniform actions, the study identifies several types of divestitures based on a unique dataset of Japanese manufacturers in the period 2004--2013 and examines them jointly as competing risks. The result of the empirical analysis supports this argument, demonstrating that even well-established factors associated with divestitures require further consideration on their distinctive relation to DD and DR. The findings reveal how DD and DR coexist and thus contribute to our understanding of reconfiguration in international business management.