Abstract
The main purpose of this study is to examine the impact of strategic alliances on shareholder wealth while also considering the role of firm growth opportunity. By focusing on Taiwan Stock Exchange-listed firms that announced the formation of such alliances from 1996 to 2000, a sample of 140 firms is obtained using event study. The empirical results indicate that the effect of strategic alliance announcements on shareholder wealth is significantly negative for high-growth firms; while high-growth firms forming intra-industry alliances or partner with foreign companies have better announcement effects. For low-growth firms, inter-industry alliances and partnerships with domestic firms have better announcement effects. The findings also indicate that nonequity alliances are appropriate for high-growth firms, while more value accrues to low-growth firms where alliances with equity are involved. Finally, in the case of R&D alliances, the effect of the alliance announcement on shareholder wealth for high-growth firms is superior to that of low-growth firms.
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