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A re-examination of value-creation through strategic alliances

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Author Info

  • Uri Ben-Zion

    ()
    (Dept. of Economics, Ben-Gurion University of the Negev)

  • Koresh Galil

    ()
    (Dept. of Economics, Ben-Gurion University of the Negev)

  • Mosi Rosenboim

    (Ben-Gurion University and Sapir College)

  • Hadas Shabtay

    (Tel-Aviv University)

Abstract

This paper uses a sample of 335 firms participating in strategic alliances in order to re-examine the value creation through strategic alliances. We show that the immediate positive response of stock markets to new strategic alliances is followed by negative abnormal returns. Twenty days after announcements, cumulative positive abnormal return is only evident for the firms with the highest stock market’s response to the announcement. We relate the positive abnormal returns reported in previous research to the presence of short-run over-reaction in stock markets and conclude in the market’s ability to identify the more valuable alliances.

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File URL: http://www.ec.bgu.ac.il/monaster/admin/papers/0902.pdf
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Bibliographic Info

Paper provided by Ben-Gurion University of the Negev, Department of Economics in its series Working Papers with number 0902.

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Length: 34 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:bgu:wpaper:0902

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Keywords: Strategic alliance; over-reaction; momentum;

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