Publication Type
Journal Article
Version
publishedVersion
Publication Date
1-2016
Abstract
This study examines how alliances affect the value and systematic risk of smaller and larger alliance partners. We find smaller partners generally gain from alliances and larger partners generally suffer significant losses. We examine this pattern for different types of alliances, experience with alliances, R&D intensity and relatedness of alliance partners. Gains to the smaller partners are particularly pronounced for technical partners, for smaller partners with high R&D intensity, and for related technical alliances. We also provide evidence that the systematic risk of both alliance partners declines following an alliance announcement, possibly explaining why larger firms engage in alliances with smaller partners despite the limited prospect for gains in market value.
Keywords
shareholder value, alliances, systematic risk, market value
Discipline
Finance and Financial Management | Technology and Innovation
Research Areas
Finance
Publication
Journal of Marketing and Strategic Management
Volume
10
First Page
120
Last Page
138
ISSN
2372-7772
Identifier
10.21607/jmsm.2016.0006
Citation
TURK, Thomas; YBARRA, Candace; GOH, Jeremy C.; HSU Junming; and LI, Li-ling.
Shareholder Value and Risk Effects of Strategic Alliances. (2016). Journal of Marketing and Strategic Management. 10, 120-138.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5047
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.21607/jmsm.2016.0006