A reexamination of value creation through strategic alliances

Uri Ben-Zion, Koresh Galil, Mosi Rosenboim, Hadas Shabtay

Research output: Contribution to journalArticlepeer-review

Abstract

This paper uses a sample of 335 firms participating in non-equity and minority equity strategic alliances to reexamine value creation through strategic alliances. We show that the immediate positive response of stock markets to new strategic alliances is followed by negative abnormal returns. Twenty days after announcements, a cumulative positive abnormal return is only evident for those firms with the highest stock market response to the announcement. We relate the positive abnormal returns reported in previous research to the presence of short-run overreaction on stock markets and conclude with the market's ability to identify those alliances that are more valuable.

Original languageEnglish
Pages (from-to)133-154
Number of pages22
JournalInternational Journal of Banking, Accounting and Finance
Volume3
Issue number2-3
DOIs
StatePublished - 1 Jan 2011

Keywords

  • Event study
  • Overreaction
  • Strategic alliance

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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