Foreign divestments: a review and research agenda

Abstract

Purpose Foreign divestment of subsidiaries is a growing research field. The global increase in investments has led to more divestments. However, much about the processes and circumstances leading to foreign divestments (FDs) requires further investigation. This study aims to review and consolidate the existing literature on foreign divestment and identify avenues for future research. Design/methodology/approach This study performs a systematic literature review and bibliometric analysis of studies on FDs to highlight the traditional and emerging perspectives in the field. This work examines foreign divestment theories based on operations, human resources, finance and marketing business functions. Findings This study sets forth a basic foreign divestment framework and highlights potential research areas. Future studies should expand to emerging economies, explore complex relationships, distinguish foreign divestment types and identify the limits of various theories and perspectives. Originality/value This study discusses traditional theories such as economies of scale, portfolio adjustment, reverse eclectic, real options and transaction cost economies. This study also examines emerging perspectives: attention-based, behavioral, committedness, contingency, favoritism, flexibility, hysteresis, legitimation, network and resource-based views. This study uses traditional and emerging theories to explain foreign divestment decisions in different business functions.