Evidence on Value Creation in the Financial Services Industries through the Use of Joint Ventures and Strategic Alliances

Authors: Gleason K.C.1; Mathur I.2; Wiggins III R.A.1

Source: The Financial Review, Volume 38, Number 2, May 2003 , pp. 213-234(22)

Publisher: Blackwell Publishing

Key:
Free Content - Free Content
New Content - New Content
Subscribed Content - Subscribed Content
Free Trial Content - Free Trial Content

Abstract:

While an extensive body of literature has examined merger, acquisition, and consolidation activity in commercial banks and other financial services firms, little attention has been paid to examining how these institutions use the cooperative activities of joint ventures and strategic alliances to accomplish their growth objectives. We analyze the effects of the use of joint ventures and strategic alliances by a sample of firms in the banking, investment services, and insurance industries. Our results show that commercial banks, investment services firms, and insurance companies experience significant abnormal returns of 0.66% on average when they announce their participation in a joint venture or strategic alliance. These abnormal returns are significantly positive across the four strategic motives of domestic, international, horizontal, and diversifying cooperative activities. Using a matched sample, we also show that our sample firms enjoy significant, positive, abnormal returns for holding periods of six, 12, and 18 months after the announcement of the cooperative activity.

Keywords: joint ventures; strategic alliances; long-horizon performance; G21/G29/G14

Document Type: Research article

DOI: 10.1111/1540-6288.00043

Affiliations: 1: Bentley College 2: Southern Illinois University

The full text electronic article is available for purchase. You will be able to download the full text electronic article after payment.

$41.72 plus tax      Refund Policy

 

OR

Back to top

Key:
Free Content - Free Content
New Content - New Content
Subscribed Content - Subscribed Content
Free Trial Content - Free Trial Content
Share this item with others: These icons link to social bookmarking sites where readers can share and discover new web pages.
Page Help Click here for Page Help
Shopping cart
Tools
Sign in






Need to register?
Sign up here
Text size: A | A | A | A