Title

Shareholder Value and Risk Effects of Strategic Alliances

Publication Type

Journal Article

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

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

Additional URL

http://doi.org/10.21607/jmsm.2016.0006

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