Do strategic alliances in a developing country create firm value? Evidence from Korean firms

Hyunchul Lee, Euije Cho, Chongcheul Cheong and Jinsu Kim

Journal of Empirical Finance, 2013, vol. 20, issue C, 30-41

Abstract: This paper examines the impact of strategic alliances on the increment of firm value in the case of Korean firms. For this, we apply an event study using OLS and GARCH market models. The results of our study show that, strategic alliances in Korea produce significant positive abnormal returns before and at the announcement date, indicating an increase in firm value. This firm value augmented by alliance announcements does not have any relationship with firms' growth but has an inverse relationship with firms' sizes. Interestingly, non-technological marketing alliances contribute to increasing firm value more than technological alliances do, regardless of partner firms' nationality. This evidence is contrasted to the cases of firms in advanced countries. Particularly, Korean firms' marketing alliances with firms in advanced G7 countries contribute to largely increasing the firm value of the former.

Keywords: Abnormal returns; Cumulative abnormal returns; Event study; Marketing alliances; Technology alliances (search for similar items in EconPapers)
JEL-codes: G10 G14 G30 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:empfin:v:20:y:2013:i:c:p:30-41

DOI: 10.1016/j.jempfin.2012.10.003

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