Abstract
This paper examines the bondholder wealth effects in international collaborations in the form of joint ventures and strategic alliances. Based on a sample of 3,070 Joint venture and strategic alliance event-firm observations from 2009 to 2015, we find positive and significant abnormal returns for bondholders. The average three-month abnormal bond return is 1.53% for foreign participants and 1.38% for U.S. participants. We focus on the wealth effects for the foreign bondholders and find that country level governance and national culture are dominant drivers of bondholder gain. Results of various robustness tests and subsample analyses confirm the main findings. Additionally, we find little evidence for a wealth transfer between stockholders and bondholders of the foreign participants. However, when a joint venture or strategic alliance leads to a loss for the participant, it is likely to be shared between the bondholders and stockholders.
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