Authors
Jeffrey L Furman, Anita M McGahan
Publication date
2002/6
Journal
Managerial and Decision Economics
Volume
23
Issue
4‐5
Pages
283-300
Publisher
John Wiley & Sons, Ltd.
Description
For many years, business turnarounds have captured the attention of scholars and fascinated executives. Yet despite their centrality as a business phenomenon, little is known about the prevalence or trajectory of turnarounds. This paper provides evidence on a broad cross‐section of publicly traded companies to fill the gap. The results indicate that since 1987 the financial‐market premium on businesses with very low performance has been higher than the premium on companies with moderately low performance. Since 1993 the premium escalated dramatically, consistent with the idea that investors became increasingly enthusiastic about the prospect of turnarounds. The evidence suggests that this enthusiasm may be unfounded: During the 1980s and 1990s, businesses that experienced an episode of profitability in the lowest quintile of the economy rarely both retained their organizational stability and …
Total citations
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Scholar articles
JL Furman, AM McGahan - Managerial and Decision Economics, 2002