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A systematic review of the literature on industrial divestment

Pedro Silva (Department of Economics, Management, Industrial Engineering and Tourism, Universidade de Aveiro, Aveiro, Portugal)
Antonio Carrizo Moreira (Department of Economics, Management, Industrial Engineering and Tourism, Universidade de Aveiro, Aveiro, Portugal)

Baltic Journal of Management

ISSN: 1746-5265

Article publication date: 26 April 2019

Issue publication date: 18 June 2019




The purpose of this paper is to review the existing research on industrial divestment in order to identify the reasons for it, the process whereby it is achieved, and the outcomes of industrial sell-offs and closures. The study reports the main findings that have gained acceptance in the literature, gaps in the research and potential directions for future research.


A three stage systematic literature review protocol was used to conduct this review. The results are organized according to an “Antecedents – Process – Outcomes” framework.


The traditional accounts of industrial divestment have been framed in terms of firms’ weak performance and over-diversification as antecedents to divestment, leading to corporate governance issues. However, the list of antecedents of industrial divestment is more extensive. There is no consensus over the impact of some factors on divestments, as is the case of firm and unit size. The results are not conclusive as to whether firm performance improves after divesting.

Research limitations/implications

Future research should analyze the relationship between the antecedents of investment and divestment. The divestment process is not well studied and more studies that engage in theory building are needed, namely, on primary data and examining the short-term and long-term impacts of divestment on performance.

Practical implications

This review offers a comprehensive synthesis of the antecedents, the process and outcomes of divestment through sell-offs and closures. Factors such as environmental conditions and the entry mode strategy are important in determining the divestment of subsidiaries. Divestments may be positively or negatively regarded by shareholders, depending on the context of the firm. Promoting managerial changes facilitates divestment.


This paper synthesizes knowledge of the main reasons as to why firms completely dispose of their assets, contributing to this under-researched field.



This work was supported by the Fundação para a Ciência e a Tecnologia (FCT) by means of a PhD scholarship (Grant No. SFRH/BD/115337/2016).


Silva, P. and Moreira, A.C. (2019), "A systematic review of the literature on industrial divestment", Baltic Journal of Management, Vol. 14 No. 3, pp. 443-461.



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