Although divestiture can offer firms performance benefits, these advantages are predicated upon asset loss. Some losses are readily anticipated, yet others – especially those involving intangible assets like IP and know-how – can bring unexpected costs. Our research demonstrates how divestors can curb these challenges by using strategic alliances as a temporary, expedient, and economical approach to “healing” the asset voids left in divestiture’s wake. We refer to these alliances as “rebound relationships,” and show that their formation is mitigated by the extent to which divestors buy and build technological expertise in their voids’ domains. Overall, our findings suggest managers should be prepared to invest in filling the voids triggered by divestiture and consider alliance engagement as a remedy.
