Spin-offs, Divestitures, and Conglomerate Investment

We examine whether spin-offs or divestitures cause improvementsin conglomerate investment efficiency. At issue are endogeneityof these restructuring decisions and correct measurement ofinvestment efficiency. Endogeneity is a problem because thefactors that induce firms to spin off or divest divisions mayalso improve investment efficiency; measurement error is a problembecause efficiency measures employ Tobin’s q as a noisyproxy for investment opportunities. We find important differencesbetween firms that divest or spin off and a control sample.After accounting for these differences and for measurement errorin q, we find no evidence of improvements in investment efficiency.(JEL G31, G34)     

Managerial trust in new product development projects: its antecedents and consequences

This research examines the impacts of relationship-based antecedents (e.g., procedural justice) and character-based antecedents (e.g., transactional leadership) on managerial trust in new product development (NPD) teams. The moderating impact of environmental turbulence on team performance is also investigated. Using data from 107 NPD projects in Turkey, we find that procedural justice, distributive justice, and transformational leadership are significantly related, and conflict is negatively related to managerial trust. We also find that managerial trust is significantly related to product success and team learning under both high and low environmental conditions, but it is significantly related to speed-to-market only under high-turbulent conditions. We conclude by discussing the theoretical and managerial implications.