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The Effects of High-Tech Companies' Strategic Alliance Announcements on the Stock Prices of the Relevant Companies: A Comparative Analysis of Indirect Benefits for Taiwan's High-Tech Industry Versus Other Industries 1998–2002

Author

Listed:
  • Chiung-Ju Liang

    (Department of Business Administration, National Taiwan University of Science and Technology, No. 43, Sec. 4 Keelung Rd., Taipei 106, Taiwan, R.O.C.)

  • Ming-Li Yao

    (Department of Finance, Takming College, 1F, No. 276, An-Min St., Shin Dian, Taipei 231, Taiwan, R.O.C.)

  • Jung-Chu Lin

    (Department of Finance, Takming College, 6F.-1, No. 12, Lane 54, Sec. 3, Sinsheng S. Rd., Da-an District, Taipei 106, Taiwan, R.O.C.)

Abstract

In recent years, the formation of strategic alliances has become an increasingly common trend among developing countries around the world. In spite of this, the numerous attempts to comprehensively review the research on the correlation between these strategic alliances and stock prices over the years have, by and large, limited their discussion to how the stock price of a corporation responds to its announcement that it is forming a strategic alliance. Only a few studies have, however, discussed the announcement's indirect impact on the stock prices of investing companies that have entered into such strategic alliances. It is for this reason that we conduct an event study and develop an empirical model to measure that indirect impact on the stock prices of investing companies engaging in strategic alliances with Taiwan's high-tech industry from 1998 to 2002, while also discussing the market's different responses in their stock prices according to various industrial types that have been used to classify these investing companies.

Suggested Citation

  • Chiung-Ju Liang & Ming-Li Yao & Jung-Chu Lin, 2005. "The Effects of High-Tech Companies' Strategic Alliance Announcements on the Stock Prices of the Relevant Companies: A Comparative Analysis of Indirect Benefits for Taiwan's High-Tech Industry Versus O," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 235-250.
    • Handle: RePEc:wsi:rpbfmp:v:08:y:2005:i:02:n:s0219091505000373
    DOI: 10.1142/S0219091505000373
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    Keywords

    Strategic alliance; indirect benefits; incremental information content;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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