SSRN-CEO Characteristics and the Value of Corporate Refocusing by Sheng Huang

Interesting look at who divests what. Important also as it suggests that CEOs do play a more important role than some might think.

SSRN-CEO Characteristics and the Value of Corporate Refocusing by Sheng Huang: from the abstract:

"...CEOs in diversified conglomerates are more likely to divest divisions that they are less qualified to manage. This evidence is consistent with CEOs divesting divisions to refocus on those divisions in which they specialize, that is, to achieve a better match between their expertise and their firm’s retained assets. Firms that divest for a better CEO-firm match experience significant improvements in operating performance, and significant abnormal stock returns, that persist three years following a divestiture. Further, among firms divesting for a better match, those with more experienced CEOs realize greater gains to firm value. In contrast, divestitures that increase corporate focus but do not improve the expertise-asset match deliver little long-run gain."