An Investigation of Industry and Firm Structural Characteristics in Corporate Turnarounds*

This article uses the structure/conduct/performance framework as an underpinning to investigate the attributes of turnaround firms. Turnaround is defined as a substantial improvement of the firms's return on assets relative to the average return of its industry. Industry and firm structural characteristics including concentration, industry growth, R&D, advertising, market share, size, diversification, capital intensity and margins are identified. The results of a series of univariate and multivariate tests run on a sample of turnaround and non‐turnaround firms indicate that size, R&D, and an interaction between operating margin and advertising can be helpful in explaining some turnaround situations.