Abstract
<p>Inter-firm cooperative arrangements involving flows and linkages that use resources and/or governance structures from autonomous firms based in different countries help in accomplishing both the individual objectives and the collective ones. Through collaboration with foreign partners, firms are able to exploit new market opportunities, minimise investment risks, set up more efficient and effective distribution channels or create products, product features, brands or services and, above all, absorb key capabilities and technologies from the partner. Literature on strategic alliances raised the issue on an alleged appropriation of benefits by Japanese firms when participating in strategic alliances. Japanese companies have experienced higher shareholders’ returns in strategic alliances with Western partners, both in the short term and in the medium one. The choice of Japanese and Western companies calls for a deeper understanding of the drivers of the alliances and the determinants of value creation without misleading influences deriving from different business environments.</p>This paper analyzes the wealth distribution taking into account the reaction of the market to the alliance as an indicator of a successful strategy. It explores the case of the automobile industry, which is characterised by a high use of inter-firm cooperation, such as strategic alliances and mergers &amp; acquisitions, to effectively compete in the global market and face the global crisis.
Highlights
Through collaboration with foreign partners, companies are able to exploit new market opportunities, minimize investment risks, set up more efficient and effective distribution channels or create products, product features, brands or services and, above all, absorb key capabilities and technologies from the partner (Kalaignanam, Shankar, & Varadarajan, 2007). Both management and economics literature have deeply investigated the drivers of the various cooperation strategies such as collaborative alliances, joint ventures and mergers & acquisitions, (e.g., Das & Kumar, 2007; Dussauge, Garrette, & Mitchell, 2000; Gomes, Barnes, & Mahmood, 2016; Robson, Leonidou, & Katsikeas, 2002; Swaminathan & Moorman, 2009)
This paper focuses on the wealth effect for Japanese and Western companies that announce equity strategic alliances
Major Japanese automakers have had the ability to focus on long-term development of core competencies and strategic management rather than the performance of the current product portfolio or short-run financial goals. They constantly over-performed the Western partners because they understood that, besides the official objectives set at the time of alliance formation, companies which gain the most from strategic alliance are those that devote resources to learning about their partners’ capabilities whilst protecting the unintended and uncompensated transfer of their own core skills and competencies
Summary
Through collaboration with foreign partners, companies are able to exploit new market opportunities, minimize investment risks, set up more efficient and effective distribution channels or create products, product features, brands or services and, above all, absorb key capabilities and technologies from the partner (Kalaignanam, Shankar, & Varadarajan, 2007) Both management and economics literature have deeply investigated the drivers of the various cooperation strategies such as collaborative alliances, joint ventures and mergers & acquisitions, (e.g., Das & Kumar, 2007; Dussauge, Garrette, & Mitchell, 2000; Gomes, Barnes, & Mahmood, 2016; Robson, Leonidou, & Katsikeas, 2002; Swaminathan & Moorman, 2009). The link between the alliances and the company value has been ijbm.ccsenet.org
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