Research Interests: corporate governance, corporate strategy, diversification, divestitures, firm scope, spinoffs
Emilie R. Feldman is an Associate Professor of Management (with tenure) at the Wharton School of the University of Pennsylvania. She graduated magna cum laude from Harvard College, where she studied Economics and French Literature, and she received her MBA and DBA in Strategy from the Harvard Business School. Her dissertation won the Wyss Award for Excellence in Doctoral Research at the Harvard Business School and was a finalist for the Wiley-Blackwell Outstanding Dissertation Award from the Academy of Management.
Professor Feldman’s research focuses on corporate strategy and governance, with particular interests in the internal functioning of multi-business firms and the role that divestitures, spinoffs, and mergers and acquisitions play in corporate reconfiguration. Her research has been published in top academic journals, including the Strategic Management Journal, Strategy Science, Organization Science, and the Academy of Management Journal. She has received numerous scholarly awards, including the Emerging Scholar Award and the Best Conference Paper Award from the Strategic Management Society as well as two Distinguished Paper Awards from the Academy of Management. Additionally, her research has been featured extensively in popular press outlets such as the New York Times, the Washington Post, the New Yorker, and Fortune.
Professor Feldman currently serves as an Associate Editor of the Strategic Management Journal, and she is on the Editorial Board of Organization Science. She is the Associate Program Chair of the Competitive Strategy Interest Group in the Strategic Management Society, and she is a member of the Executive Committee of the Business Policy and Strategy Division of the Academy of Management.
Professor Feldman teaches courses on mergers and acquisitions, divestitures, corporate strategy, and corporate governance in the undergraduate, MBA, law, and executive programs at Wharton and Penn. She received the Undergraduate Excellence in Teaching Award in 2017. She has also consulted and served as a speaker to numerous practitioner audiences.
Abstract: This study analyzes how the divestitures that are impelled by activist investors in their campaigns against public corporations affect shareholder value. Using hand-collected data on the activist campaigns that were launched against and the divestitures that were undertaken by Fortune 500 companies between 2007 and 2015, we find that activist-impelled divestitures are more positively associated with immediate and longer-term measures of shareholder value than comparable manager-led divestitures. These performance differences persist for nearly two years after the completion of these deals. Our results empirically test the idea that firms with agency problems unlock shareholder value when they divest, and support the notion that activist investors fulfill an important external governance function. Our work also opens new research opportunities and offers practical implications as well.
Emilie Feldman and Metin Sengul (Working), Identification in Strategy and Management Research.
Emilie Feldman and Lisa Tang (Working), The Strategic Complementarity between M&A and R&D.
Emilie Feldman and Victor Bennett (2017), Make Room! Make Room! A Note on Sequential Spinoffs and Acquisitions, Strategy Science, 2 (2), pp. 100-110.
Abstract: In this study, we identify a novel pattern of deal-making activity—spinoffs followed by acquisitions—that has yet to be analyzed in the corporate strategy literature. We present a set of descriptive results showing that firms undertake spinoffs followed by acquisitions at a rate that is too high to be attributable to random chance. We also find that the acquired businesses are typically more closely related to these companies’ remaining operations than are the spun-off subsidiaries, a pattern that is common across companies with different characteristics. Together, these results suggest that firms may use sequential spinoffs and acquisitions to achieve ongoing synergies and improve the allocation of managerial attention within their organizations. We conclude by discussing how our work contributes to ongoing conversations in corporate strategy about patterns of acquisitions and divestitures, resource redeployment, reconfiguration, and firm scope.
Emilie Feldman (2016), Corporate Spinoffs and Capital Allocation Decisions, Strategy Science, 1 (4), pp. 256-271.
Abstract: This paper investigates how spinoffs affect capital allocation decisions in diversified firms. The sensitivity of capital expenditures to investment opportunities, representing the efficiency of capital allocation decisions, improves when firms undertake spinoffs. The improvement in the efficiency of capital allocation decisions is most pronounced immediately following the completion of spinoffs (though it attenuates thereafter), and in companies that operate in a moderate (as opposed to a high or a low) number of businesses pre-spinoff. Together, these findings uncover a novel benefit that is associated with spinoffs, an improvement in the process by which managers allocate capital in the divesting firms. These results also suggest that an important theoretical mechanism that may be driving this improvement is that spinoffs enable managers to devote more attention to the capital allocation process within their remaining businesses.
Emilie Feldman (2016), Dual Directors and the Governance of Corporate Spinoffs, Academy of Management Journal, 59 (5), pp. 1754-1776.
Abstract: This paper investigates how "dual directors" enable firms that undertake corporate spinoffs to manage their post-spinoff relationships with the firms they divest, as well as the performance implications of dual directors serving simultaneously on these companies' boards. While the presence of dual directors is positively associated with the average stock market returns of parent and spinoff firms, their presence is increasingly positively associated with parent firm performance but increasingly negatively associated with spinoff firm performance as the share of sales a spinoff firm makes to its parent firm rises. These findings show that while dual directors give a parent firm power over its spinoff firm, dual directors only exercise that power at the spinoff firm's expense when that company is highly dependent on its parent firm.
Abstract: This paper investigates how corporate spinoffs affect managerial compensation. These deals are found to improve the alignment of spinoff firm managers' incentive compensation with stock market performance, especially among spinoff firm managers that used to be divisional managers of the spun-off subsidiary and particularly when the spun-off subsidiary performs better than or is unrelated to its parent firm's remaining businesses. By contrast, incentive alignment does not improve for the parent firm managers running the divesting companies. This finding appears to be driven by a significant post-spinoff increase in these managers' incentive compensation, the magnitude of which is inversely related to governance quality in their firms. Together, these results elucidate how spinoffs influence managerial compensation in diversified firms and the companies they divest.
Emilie Feldman (2016), Corporate Spinoffs and Analysts' Coverage Decisions: The Implications for Diversified Firms, Strategic Management Journal, 37 (7), pp. 1196-1219.
Abstract: This paper investigates how spinoffs improve the quality of analysts' research about diversified firms, theorizing that these deals may induce analysts to revisit their earlier coverage decisions. The gains resulting from these shifts are expected to be more pronounced when a firm undertakes a legacy (rather than a non-legacy) spinoff, which removes the business that may be constraining analysts' coverage decisions in the first place. Consistent with this argument, firms that undertake legacy spinoffs experience greater improvements in the composition and quality of their analyst coverage than their non-legacy counterparts, and in their overall forecast accuracy and stock market performance. Taken together, these findings shed light on the relationships among the scope decisions, analyst coverage, and valuations of diversified firms.
This course explores the role of mergers and acquisitions and alternative methods of corporate development in advancing the strategies of operating business. Emphasis is on the way companies use acquisitions to alter business mixes; seize opportunities in new products, technologies and markets; enhance competitive positioning; adjust to changing economics, and promote value-creating growth. Although the course will emphasize strategic acquisitions, it also will explore leveraged buy-outs and hostile financial acquisitions as well as their influence on corporate buyers. Please note that you must fulfill the prerequisites in order to enroll in this class.
This course explores the role of mergers and acquisitions and alternative methods of corporate development in advancing the strategies of operating business. Emphasis is on the way companies use acquisitions to alter business mixes; seize opportunities in new products, technologies and markets; enhance competitive positioning; adjust to changing economics, and promote value-creating growth. Although the course will emphasize strategic acquisitions, it also will explore leveraged buy-outs and hostile financial acquisitions as well as their influence on corporate buyers. Please note that you must fulfil the prerequisites in order to enroll in this class.
Slower earnings growth, shifts in technology, interest rates that could soon rise and record stock prices have combined to create a perfect storm for mergers and acquisitions.Knowledge @ Wharton - 2016/11/29