Alliances motive and the stock market response: A comparative analysis across industries

We analyze the announcement-period returns of 4315 two-party, non-equity alliances undertaken by US-based firms between 1986 and 2015 in 11 industries and find positive returns for all of the 11 samples, with the Drug industry reporting the highest (2.69%) cumulative abnormal return (CARs) and Whole...

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Autores principales:	Manish Tewari, Pradip Kumar Ramanlal, Rajesh Kumar, Soumendra De
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2019
Materias:	strategic alliance performance exploration exploitation inter-industry studies Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/c73c4807c4d847269878d2616eaecab4
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spelling	oai:doaj.org-article:c73c4807c4d847269878d2616eaecab42021-12-02T16:07:29ZAlliances motive and the stock market response: A comparative analysis across industries2331-197510.1080/23311975.2019.1608006https://doaj.org/article/c73c4807c4d847269878d2616eaecab42019-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2019.1608006https://doaj.org/toc/2331-1975We analyze the announcement-period returns of 4315 two-party, non-equity alliances undertaken by US-based firms between 1986 and 2015 in 11 industries and find positive returns for all of the 11 samples, with the Drug industry reporting the highest (2.69%) cumulative abnormal return (CARs) and Wholesale Trade for Non-Durable Goods industry the lowest (0.84%) around the five-day window surrounding the announcement of the alliances. Using proxy variables, we study whether the alliances in the specific industry are motivated by Exploration, Exploitation, or a combination of both Exploration and Exploitation motive. We find strong evidence that the alliances in the Business Services; Computer and Office Equipment; Electronic and Electrical Equipment; and Telecommunications industries are Exploration motivated. Alliances in the Investment & Commodity Firms, Dealers, and Exchanges; Measuring, Medical, Photo Equipment and Clocks; Prepackaged Software; and Wholesale Trade-Durable Goods industries are motivated by the Exploitation motive, whereas alliances in the Communications Equipment and Drugs industries are motivated by both Exploration and Exploitation (dual) motives. The average CAR (ACAR) for alliances in industries motivated by both Exploration and Exploitation motives is the highest at 2.2%—thereby, creating the most value—followed by Exploitation motivated at 1.58% and Exploration motivated at 1.23%.Manish TewariPradip Kumar RamanlalRajesh KumarSoumendra DeTaylor & Francis Grouparticlestrategic allianceperformanceexplorationexploitationinter-industry studiesBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 6, Iss 1 (2019)
institution	DOAJ
collection	DOAJ
language	EN
topic	strategic alliance performance exploration exploitation inter-industry studies Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	strategic alliance performance exploration exploitation inter-industry studies Business HF5001-6182 Management. Industrial management HD28-70 Manish Tewari Pradip Kumar Ramanlal Rajesh Kumar Soumendra De Alliances motive and the stock market response: A comparative analysis across industries
description	We analyze the announcement-period returns of 4315 two-party, non-equity alliances undertaken by US-based firms between 1986 and 2015 in 11 industries and find positive returns for all of the 11 samples, with the Drug industry reporting the highest (2.69%) cumulative abnormal return (CARs) and Wholesale Trade for Non-Durable Goods industry the lowest (0.84%) around the five-day window surrounding the announcement of the alliances. Using proxy variables, we study whether the alliances in the specific industry are motivated by Exploration, Exploitation, or a combination of both Exploration and Exploitation motive. We find strong evidence that the alliances in the Business Services; Computer and Office Equipment; Electronic and Electrical Equipment; and Telecommunications industries are Exploration motivated. Alliances in the Investment & Commodity Firms, Dealers, and Exchanges; Measuring, Medical, Photo Equipment and Clocks; Prepackaged Software; and Wholesale Trade-Durable Goods industries are motivated by the Exploitation motive, whereas alliances in the Communications Equipment and Drugs industries are motivated by both Exploration and Exploitation (dual) motives. The average CAR (ACAR) for alliances in industries motivated by both Exploration and Exploitation motives is the highest at 2.2%—thereby, creating the most value—followed by Exploitation motivated at 1.58% and Exploration motivated at 1.23%.
format	article
author	Manish Tewari Pradip Kumar Ramanlal Rajesh Kumar Soumendra De
author_facet	Manish Tewari Pradip Kumar Ramanlal Rajesh Kumar Soumendra De
author_sort	Manish Tewari
title	Alliances motive and the stock market response: A comparative analysis across industries
title_short	Alliances motive and the stock market response: A comparative analysis across industries
title_full	Alliances motive and the stock market response: A comparative analysis across industries
title_fullStr	Alliances motive and the stock market response: A comparative analysis across industries
title_full_unstemmed	Alliances motive and the stock market response: A comparative analysis across industries
title_sort	alliances motive and the stock market response: a comparative analysis across industries
publisher	Taylor & Francis Group
publishDate	2019
url	https://doaj.org/article/c73c4807c4d847269878d2616eaecab4
work_keys_str_mv	AT manishtewari alliancesmotiveandthestockmarketresponseacomparativeanalysisacrossindustries AT pradipkumarramanlal alliancesmotiveandthestockmarketresponseacomparativeanalysisacrossindustries AT rajeshkumar alliancesmotiveandthestockmarketresponseacomparativeanalysisacrossindustries AT soumendrade alliancesmotiveandthestockmarketresponseacomparativeanalysisacrossindustries
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Alliances motive and the stock market response: A comparative analysis across industries

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