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The impact of M&A and joint ventures on the value of IT and non-IT firms

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  • Sang-Yong Lee

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  • Kim Lim

    ()

Abstract

This paper aims to study and provide empirical evidence on the impact of mergers and acquisitions (M&A) and joint ventures on the value of IT and non-IT firms. Using the event study methodology, we investigate the effect of such strategic alliance announcements on firm value in a sample of 170 firms. The results show that such strategic alliance announcements create significant gains in firm value. When the sample is divided into IT and non-IT firms, we find stronger support for positive impact on gains in firm value among non-IT firms than among IT firms. We also find that the smaller strategic alliance partners perform better than their larger partners. However, we fail to find any significant difference in impact on firm value between merger/acquisition and joint venture announcements. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Sang-Yong Lee & Kim Lim, 2006. "The impact of M&A and joint ventures on the value of IT and non-IT firms," Review of Quantitative Finance and Accounting, Springer, vol. 27(2), pages 111-123, September.
  • Handle: RePEc:kap:rqfnac:v:27:y:2006:i:2:p:111-123
    DOI: 10.1007/s11156-006-8792-5
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    File URL: http://hdl.handle.net/10.1007/s11156-006-8792-5
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    References listed on IDEAS

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    1. Erik Brynjolfsson & Shinkyu Yang, 1997. "Information Technology and Productivity: A Review of the Literature," Working Paper Series 202, MIT Center for Coordination Science.
    2. Su, Han Chan & Kensinger, John W. & Keown, Arthur J. & Martin, John D., 1997. "Do strategic alliances create value?," Journal of Financial Economics, Elsevier, vol. 46(2), pages 199-221, November.
    3. Healy, Paul M. & Palepu, Krishna G. & Ruback, Richard S., 1992. "Does corporate performance improve after mergers?," Journal of Financial Economics, Elsevier, vol. 31(2), pages 135-175, April.
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    Cited by:

    1. Mufaddal Baxamusa & Saima Javaid & Khadija Harery, 2015. "Network centrality and mergers," Review of Quantitative Finance and Accounting, Springer, vol. 44(3), pages 393-423, April.

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