FOREIGN DIVESTMENT - MAGNITUDE AND FACTORS

There is ample evidence that the number of divestments by multinational firms has been increasing. The explanation is mainly financial—namely, poor performance. However, a strategic dimension is becoming more apparent as some firms divest themselves of subsidiaries that do not “fit” even if they are profitable. Finally, organizational and personal factors definitely affect the decision-making process leading to divestment. In conclusion, divestment is becoming part of the repertory of multinationals, but we still lack comparative data about U.S.-based divestments. © 1979, Academy of International Business.