Joint Venture Formations and Stock Market Reactions: An Assessment in the Information Technology Sector

Abstract

Abstract A central area of research in contemporary strategic management research is concerned with “hybrid organizational arrangements” (Borys & Jemison, 1989) at the “interorganizational” or the “network” level (Powell, 1990) involving mechanisms such as joint ventures, technology licensing, cooperative research and development (R&D), and marketing arrangements (Contractor & Lorange, 1988; Harrigan, 1985; Kogut, 1988a; Mariti & Smiley, 1983). Within this general stream, joint venture is an important mechanism that can give a firm new and powerful sources of competitive advantage (Harrigan, 1988) and distinctive competencies (Kanter, 1989; Powell, 1990). Research on joint ventures spans disciplinary boundaries. As represented in Figure 12.1, we categorize the existing research into four types using two dimensions: (1) the dominant theoretical perspective, classified as either the strategic behavior or the transaction cost perspective, and (2) the research focus, namely, whether the focus is on the motives for the formation of joint ventures or on their impacts.