This study analyzed the determinants of corporate divestitures centering on Korea's corporate divestiture system. The management characteristics of divesting firms were compared and analyzed against matched firms based on the one-to-three-year period prior to divestiture. The determinants of corporate divestitures were analyzed using a logit model, and the determinants by divestiture type were analyzed using a multinomial logit model. Korean corporate divestitures were found to be more likely utilized by large firms or firms with long histories for the purpose of overcoming sluggish sales while pursuing workforce reductions. Meanwhile, poor management performance immediately prior to divestiture was not found to be a determinant of corporate divestitures. In the analysis by divestiture type, it was estimated that spin-offs involving personnel (in-kind splits) and industry-switching divestitures were more likely to be utilized for the purposes of overcoming sales stagnation and workforce reduction. Additionally, the emergence of positive abnormal returns following divestiture announcements suggests that corporate divestitures alleviate information asymmetry problems in the capital market to some degree. Given that corporate divestitures reduce the inefficiencies of large-scale corporate management and improve corporate competitiveness, the original purpose of introducing the divestiture system appears to have been achieved to some extent. There is a need to continue pursuing improvements in the corporate divestiture system so that the divestiture function can be strengthened as a strategic management tool for flexibly responding to changes in the business environment.