Equity Participation and the Wealth Effect of Strategic Alliances: Evidence From Taiwan
- Topics:
- Strategic Management Tools
- Tags:
- Equity,
- Finance,
- Financial Services,
- Investment,
- Management,
- Stock,
- Strategic Alliance,
- Strategy
- Source:
- National Cheng Kung University
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Overview: This paper presents international evidence by examining the wealth effect of minority equity participation in strategic alliances by Taiwanese firms. Consistent with United States evidence, it has been found that announcements of strategic alliances by Taiwanese firms are, on average, associated with significantly positive abnormal stock returns. It has also been found that the stock market response to alliances with minority equity investment is significantly larger than the pure contract agreements. These findings hold even after controlling for other potential explanatory variables. This paper makes a valuable contribution to the literature by documenting the first direct evidence of the wealth effect of equity participation in strategic alliances.
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Format: PDF | Size: 64KB | Date: Sep 2001 | Pages: 25
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