The Value Impact of Corporate Collaboration

A significant body of research has addressed the effects of strategic alliances and joint ventures on firm value, although the breadth of prior eventstudy research is not as great as for M&A announcements.This chapter provides an overview of existing evidence for the value firms create by corporate collaboration. This encompasses all value-related research (in particular, event studies) on alliance formation, termination, and other events relating to them.

Rather than only reviewing value-related alliance research, however, this chapter appraises the value-related empirical support for the propositions derived in chapter 2. Such a comparison allows identifying achievements and limitations of existing event-study literature. On the one hand, factors found significant in prior event studies may be necessary controls for future research efforts. On the other hand, propositions not yet tested in a value-related context represent areas for future research. Consequently, this investigation is prerequisite for the subsequent empirical analysis. The present chapter proceeds as follows: Subchapter 3.1 reviews the overall impact of strategic alliances and joint venture formation as well as termination on shareholder value. Subchapter 3.2 addresses the drivers of cross-sectional variation in valuation effects. Finally, subchapter 3.3 discusses the achievements and shortcomings of prior value-related research vis-à-vis the broader spectrum of potential explanations raised in the preceding chapter. It culminates in deriving the hypotheses to be empirically tested.