The Wealth Effects of Horizontal and Vertical International Joint Ventures on US Announcers, Rivals, Suppliers, and Corporate Customers
Date Issued
2006
Date
2006
Author(s)
Lin, Yu-Lun
DOI
en-US
Abstract
The main objective of this paper is to test the value creation of horizontal and vertical international joint venture on US announcers, industry counterparts, suppliers, and corporate customers. I include American firms participating in international joint ventures during 1990-2003 in the sample. Then I distinguish horizontal and vertical international joint venture based on the relationship between US announcing companies and the venture established in America. An international joint venture is considered horizontal if US announcers share the same four-digit SIC codes with the venture. The definition of vertical international joint venture in my study is that US firms establish the venture in supplier industries that are identified by benchmark input-output accounts for the US economy.
The empirical results indicate that the difference between horizontal and vertical international joint venture. Both suppliers and customers in vertical international joint venture samples experience negative price effects during announcement period. However, there is not significant impact of horizontal international joint ventures on suppliers and customers. Finally, I conduct cross-sectional analysis to examine the relation between abnormal returns and some independent variables, such as the IJV industry structure, the competition of supplier industries, customer concentration, etc. I find evidence suggesting that if the industry is concentrated, the players in the industry will experience more wealth gains than those in a more competitive industry.
Subjects
競爭對手
上下游
international joint venture
rivals
suppliers
customers
Type
thesis
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