The Value Creation Effects Of Strategic Alliances For Listed Firms From Investors' Perspective

Strategic alliances are an inevitable result of globalization,technological change and blurring industry boundaries.As the growing of market competition,there is not a company who can acquire all the resources and technologies independently to adapt to the changing environment without cooperating with any other enterprises.Strategic alliances have become an important tool for firms to create value and maintain competitive advantage.However,managers are not able to distinguish the alliance value from a firm's financial performance because the value created by alliances is integrated in the firm's value.Therefore,based on event study,researchers take stock market reactions to alliance events as a reasonable indicator of the future value of alliances and treat it as a proxy for alliance value creation effects,which provides a path for the study of alliance value.However,extant research is inconclusive about the value creation effects of strategic alliances because investors react differently to alternative alliance activities.This is because alliances are always time consuming and have great uncertainties.Additionally,due to the ambiguity of alliance performance and the information asymmetry problem,investors are not able to evaluate the implication of alliances accurately.Consequently,the purpose of this paper is to study the value creation effects of strategic alliancs to listed firms from investors' perspective and explore factors influencing the value creation effects of strategic alliances.This paper has great implications for both managers and investors in making effective decisions.Based on signaling theory,synergy theory and coopetition theory,this paper establishes an integretive theoretical model for the value creation effects of strategic alliances.It examines the significance of alliance value creation effects,and further explores the impacts of signal releasing characteristics and signal contents on the value creation effects of alliances.Based on a sample of alliance announcements released by high-tech listed firms on the Shenzhen Exchange during 2014 and 2016,this paper empirically tests the value creation effects of strategic alliances by calculating investors' reactions to alliance announcements using event study and regression analysis.This study expands and deepens the relevant research on alliance value creation effects.Firstly,considering the long-term and unstable characteristics of strategic alliances,the value creation effect of initial announcements and subsequent announcements are studied based on the signaling theory and alliance dynamics theory.In this article,initial annoucements are divided into inclination announcements and establishment annoucements,and subsequent announcements are subdivided into progress announcements,approval announcements,registration announcements,renewal announcements and termination announcements.Using event study,the value creation effects of different staged announcements are examined.The findings show that alliance initial announcements are able to create significant and positive value for listed firms,but the value for subsequent announcements are not significant.However,based on subgroup samples,investors react differently to alternative types of alliance announcements.Secondly,due to the information asymmetry problem,signal releasing characteristics are belived to affect the communicative effectiveness between investors and firms,and thus influencing the value creation effects of allicances.Therefore,this paper studies the impacts of signal visibility,signal uncertainty and signal readability on the alliance value creation effects.It is found that signal visibility,uncertainty and readability have significant positive effects on the value effects of strategic alliances.Thirdly,alliance partners' synergy effects are the key source of value created by strategic alliances,this paper thus further focuses on the match of alliance partners.Based on synergy theory and age dependence theory,this study explores the relationship between partner age asymmetry and alliance value creation.In addition,it examines the moderating effect of alliance type,firm age and business similarity on the relationship of partner age asymmetry and alliance value implications.The results illustrate that different aged partners are higher valued in equity alliances than non-equity alliances;investors make higher evaluations on differently aged partners when they are from the same industry;the 3 way interaction effect of firm age,business similarity and partner age asymmetry is proved to be significant.Finally,coopetition is also an important factor for alliance success and value creation.It is espetially true for joint ventures that commitments and control distribution may affect the shared value creation and the private value capture jointly.Therefore,this study further examines the interative effects of joint venture commitment and control on the value creation effects of strategic alliances.The study finds that time commitment has a negative impact on alliance value,and the relationship between investment commitment and alliance value creation is not significant.However,joint venture control has significant moderating effects on both time commitment and investment commitment.Specifically,when the focal firm holds the absolute control rights of an joint venture,time commitment has the greatest negative effects on alliance value creation,while investment commitment has the highest positive effects on alliance value creation.The theoretical contributions of this paper are as follows.It proposes an integrative framework for the analysis of alliance value creation effects from the perspective of dynamic process.In addition,it untackles the information asymmetry problem,and proposes that alliance value could be improved by enchancing the effeciency of communication between investors and firms through upgrading the quality of signals.Further,this study uncovers the internal mechanisms of alliance value creation between asymmetric partners by exploring the interactive effects of alliance partners' synergy effect and the specific attributes of firms and alliances.At last,this paper introduces coopetition theory into joint venture decision studies,distinguishes the value creation and value capture effects and proposes the internal mechanisms of alliance value creation.Practically,this paper helps managers make decisions to gain the maximize value from alliances.Furthermore,it provides theoretical suggestions to managers from perspectives of alliance information disclosure,partner selection,and alliance governance.