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A re-examination of value-creation through strategic alliances


  • 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)


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.

Suggested Citation

  • Uri Ben-Zion & Koresh Galil & Mosi Rosenboim & Hadas Shabtay, 2009. "A re-examination of value-creation through strategic alliances," Working Papers 0902, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:0902

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    References listed on IDEAS

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    10. Denter, Philipp & Morgan, John & Sisak, Dana, 2011. ""Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests," Economics Working Paper Series 1128, University of St. Gallen, School of Economics and Political Science.
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    More about this item


    Strategic alliance; over-reaction; momentum;

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights


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