Abstract
In this research, we examine how R&D alliance announcements affect the stock market's evaluation of announcing firms. Drawing on the signaling theory, we propose two competing hypotheses regarding the relationship between alliance technological diversity and abnormal returns. Specifically, two moderators, a firm's exploration strategy and knowledge stock, are identified to explore their moderating effects on above relationship. We tested our hypotheses using an event-study analysis of 645 research and development (R&D) alliances announced during the period of 2001¨C2005 by pharmaceutical firms in the U.S. The results show that the relationship between alliance technological diversity and abnormal returns seems to be negative rather than positive. In addition, exploration strategy and knowledge stock positively moderate this positive relationship between alliance technological diversity and abnormal returns. Lastly, research and practical implications are discussed.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
