Do strategic alliances create value?

Su Han Chan; John W. Kensinger; Arthur J. Keown; John D. Martin

doi:10.1016/s0304-405x(97)00029-9

Journal of Financial Economics Vol. 46 No. 2 1997

Do strategic alliances create value?

Su Han Chan^1,2; John W. Kensinger³; Arthur J. Keown⁴; John D. Martin⁵

¹ California State University, Fullerton · ² University of Hong Kong · ³ University of North Texas · ⁴ Virginia Tech · ⁵ The University of Texas at Austin

Abstract

We investigate share price responses to the formation of 345 strategic alliances spanning 1983–1992. The average stock price response is positive, with no evidence of wealth transfers. This is true for horizontal alliances (involving partner firms in industries with the same three-digit SIC codes) as well as non-horizontal alliances. For horizontal alliances, more value accrues when the alliance involves the transfer or pooling of technical knowledge than with nontechnical alliances. Finally, partnering firms tend to display better operating performance than their industry peers over the five-year period surrounding the year in which an alliance is formed.

DOI: 10.1016/s0304-405x(97)00029-9
Volume: 46
Issue: 2
Pages: 199-221
Language: en
Sources: bibtex:phds-export.bib openalex crossref

Do strategic alliances create value?

Abstract

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