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Is experience valuable in international strategic alliances?

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  • Lai, Jung-Ho
  • Chang, Shao-Chi
  • Chen, Sheng-Syan
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    Abstract

    This study investigates whether firms benefit from prior alliance experiences as they undertake international strategic alliances. Different from previous studies that mostly focus on equity joint ventures, this study investigates non-equity alliances. This specific investigation is essential, because the complexity and uncertainty associated with such alliances potentially magnify the benefits of experiential learning. With a sample of 629 international, non-equity alliances formed by US firms, our results confirm the contribution of ISA experience in general, as well as that of experience specific to partner's country of origin and alliance activity type. The results also reveal a contingent benefit of ISA experiences, where experience of technological cooperation and experience with alliance partners from emerging countries both add more to firm value. We derive consistent evidence, as performance is assessed either by the market's perception of ISA value creation, or by the post announcement operating earnings in practice.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 16 (2010)
    Issue (Month): 3 (September)
    Pages: 247-261

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    Handle: RePEc:eee:intman:v:16:y:2010:i:3:p:247-261

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    Keywords: International alliances Experience Non-equity Stock returns Operating performance;

    References

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    Cited by:
    1. Li, Dan & Miller, Stewart R. & Eden, Lorraine & Hitt, Michael A., 2012. "The Impact of Rule of Law on Market Value Creation for Local Alliance Partners in BRIC Countries," Journal of International Management, Elsevier, vol. 18(4), pages 305-321.

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