Business restructuring is not a new phenomenon, but it has been used by various business practitioner s since past to boost performance. An inconclusive body of literature gives further evidence on this issue. For instance, Opler, T. et al. (1996), reports that in the US alone from 1976 to 1990 there were 35,000 corporate restructurings with a total market value of $2.6 trillion.
In another findings, Blair et al. (1991), reports that the dollar value of horizontal mergers in US and UK increased from $25 billion in 1970 and 1978 to $261 billion in 1979 and 1987. On a contrary opinion, Opler, T. et al. (1996) advocate that corporate restructurings are mainly motivated by consolidation and that they would decrease competition, thereafter, hamper business operations in long term. In reacting to these ideas, Valsan (2001) views that corporate restructuring enhances market discipline, force the firms to focus on the industries in which they have a competitive advantage and reduce capacity at both the firm and industry levels; therefore, improves productivity and efficiency.
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