The Wealth Effect of Japanese-U.S. Alliances
Journal
Financial Management
Journal Issue
37
Pages
271-301
Date Issued
2008
Author(s)
Abstract
We investigate the wealth impact for Japanese and US firms that announce nonequity strategic alliances. We find that on average, both Japanese and US shareholders benefit from the formation of international alliances. We also find that shareholders earn larger abnormal returns in these alliances when the partnering firms are relatively small in size, have higher growth opportunities, or are less profitable. We show that both Japanese and US partnering firms display significant improvements in operating performance over the three‐year period subsequent to the formation of international alliances.
Type
journal article