How do strategic alliance formations create shareholder value? An application of the event study methodology in the B2B context

Abstract

By announcing the formation of business-to-business (B2B) relationships, such as strategic alliances, firms send signals to market observers who form expectations about these firms' future performance, ultimately affecting their shareholder value. The use of an event study methodology enables scholars to gauge the extent of the shareholder value these relationships can create. The role of the present study is twofold. First, we aim to systematically investigate the relationship between strategic alliance formations and firm shareholder value, identifying conditions under which strategic alliances create or even destroy value, including factors related to the firms and alliances as well as their interactions. Our second objective is to explain how B2B marketing researchers can apply the event study methodology in the context of strategic alliances. We provide a detailed explanation of how scholars can apply an event study methodology to strategic alliances, and B2B relationships more broadly, taking into account the research area-specific considerations, such as the appropriate modeling approach, variable coding, and event and estimation windows.