The Role of Innovation in Value Creation after Spin-off in the USA

This paper suggests a model of value creation during the US spin-off process. While it is a well-known fact that the post-spin-off performance is in general positive, the reason for the performance is still unclear. Based on previous research, we suggest that the parent firm would experience better performance after spin-off. We also suggest that the spin-off would experience better performance vis-a-vis benchmark, due to their innovative activity. We argue that the innovation after spin-off would be the key to explain the relationship between spin-off event and post-spin-off performance.