This study examines 386 cases of downsizing-type restructuring and 283 cases of expansion-type restructuring conducted by domestically listed manufacturing firms from November 1997 to December 2002, comparing the likelihood of restructuring, announcement effects and long-term performance, and the factors affecting short- and long-term performance across the foreign exchange crisis period and the subsequent normal period. The findings first suggest which type of restructuring is desirable for enhancing firm value among the business restructurings actively undertaken by Korean firms following the foreign exchange crisis. Specifically, downsizing-type restructuring had a very positive effect on both short- and long-term firm value, whereas expansion-type restructuring provided no benefit to short-term performance, and in terms of long-term performance, it was positive during the normal period but negative during the economic crisis period. Meanwhile, logistic regression results show that larger firms and those with higher systematic risk engaged in more active restructuring in both downsizing and expansion types, firms with abundant liquidity were active in expansion-type restructuring while those with scarce liquidity preferred downsizing-type restructuring. As factors affecting only downsizing-type restructuring, the debt ratio showed a significant positive relationship across all periods, and the bank borrowing ratio showed a significant positive relationship during the crisis period. As factors affecting only expansion-type restructuring, controlling shareholder ownership showed a significant positive relationship during the normal period, and foreign ownership showed a significant negative relationship during the crisis period. Past management performance measured by Tobin's Q showed a significant negative relationship with downsizing-type restructuring and a significant positive relationship with expansion-type restructuring, primarily during the normal period, and chaebol firms actively pursued downsizing-type restructuring during the crisis period and expansion-type restructuring during the normal period. Cross-sectional regression results on factors affecting announcement effects and long-term performance of restructuring show that factors such as firm size, liquidity indicators, systematic risk, and chaebol affiliation had significant positive relationships with both announcement effects and long-term performance regardless of restructuring type. In contrast, debt ratio, controlling shareholder ownership, and foreign ownership generally showed positive relationships with announcement effects and long-term performance of downsizing-type restructuring, but generally negative relationships with those of expansion-type restructuring, forming a contrast. Bank borrowing ratio and Tobin's Q showed contradictory results between announcement effects and long-term performance without a consistent pattern or yielded different results depending on the analysis period, and domestic institutional ownership was not a significant factor in the short- or long-term performance of restructuring.