R&D intensity, cross-border strategic alliances, and valuation effects
Sian Owen and
Journal of International Financial Markets, Institutions and Money, 2015, vol. 35, issue C, 1-17
This paper examines the role of R&D intensity in cross border strategic alliance formation. Firms can exploit their existing R&D capabilities by entering into overseas markets via strategic alliances. Consistent with our hypothesis, we find R&D intensity to be a major determinant of cross-border strategic alliance decisions involving US firms. R&D intensive firms prefer alliances in Continental Europe and Emerging Asia-Pacific regions. R&D intensity, however, cannot distinguish between the ownership forms of the overseas partner as the firm may not have the opportunity to choose the nature of the partner once the alliance decision has been made. Finally, we examine the valuation effect of cross-border strategic alliance announcements and find the associated wealth effects to be driven primarily by R&D intensity.
Keywords: Strategic alliances; R&D investment; Geographical locations; Partner selection; Valuation effect (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:35:y:2015:i:c:p:1-17
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