Short- and long-term market returns of international codevelopment alliances of new products

Nukhet Harmancioglu (), David A. Griffith () and Tuba Yılmaz ()
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Nukhet Harmancioglu: Koc University
David A. Griffith: Texas A&M University
Tuba Yılmaz: BI Norwegian School

Journal of the Academy of Marketing Science, 2019, vol. 47, issue 5, No 9, 939-959

Abstract: Abstract Strategic alliances entail process-oriented decisions, in which information about outcomes is unveiled over time. Therefore, it is difficult for investors to gauge the value of such decisions in the short term; longitudinal analysis is necessary. Accordingly, the authors apply latent growth modeling to a data set of 270 international codevelopment alliances announced over an 18-year period. The results demonstrate that investors reward firms for their international codevelopment alliances in the short term but punish them in the long term. Initially, exchange conditions have positive effects, but these effects decrease over time. However, the decrease slows when firms’ market updates contain positive news. Although investors view sharing of innovation resources as a competitive advantage in the short term, they perceive exchange conditions as transaction hazards in the long term. The results also show that long-term decreases in market returns are greater when codevelopment activities are conducted offshore rather than onshore.

Keywords: International codevelopment alliance; New products; Event study analysis; Latent growth analysis (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s11747-018-00622-w

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