Testing of the Positive-Multinational Network Hypothesis: Wealth Effects of International Joint Ventures in Emerging Markets

Larry J. Prather and Jae Hoon Min
Additional contact information
Larry J. Prather: East Tennessee State University, U.S.A.
Jae Hoon Min: Seowon University, Korea

Multinational Finance Journal, 1998, vol. 2, issue 2, 151-165

Abstract: This article examines announcement effects of 240 international joint ventures undertaken by firms to ascertain their impact on shareholders' wealth. The positive-multinational-network hypothesis suggests that the market reaction should be related to the option value of the venture. To test the positive-multinational-network hypothesis, first the market reaction between ventures into developed and less-developed countries are contrasted. Then, the reaction between ventures that form the basis for initial operations in a country and subsequent operations are contrasted. Results indicate that venture-specific characteristics influence announcement effects and that the positive-multinational-network hypothesis is supported.

Keywords: event studies; information and market efficiency; investment policy; joint ventures (search for similar items in EconPapers)
JEL-codes: G14 G31 G34 (search for similar items in EconPapers)
Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.mfsociety.org/modules/modDashboard/uplo ... kbadtq2kmi7n1qh3.pdf
http://www.mfsociety.org/modules/modDashboard/uplo ... ogleScholar/652.html

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mfj:journl:v:2:y:1998:i:2:p:151-165

Access Statistics for this article

Multinational Finance Journal is currently edited by Panayiotis C. Andreou

More articles in Multinational Finance Journal from Multinational Finance Journal Contact information at EDIRC.
Bibliographic data for series maintained by Theodossiou Panayiotis ().