Session 422

Alliance Formation and Stakeholder Perceptions

Track N

Date: Sunday, September 21, 2014

 

Time: 15:45 – 17:00

Paper

Room: Helsinki


Session Chair:

  • Mazhar Islam, Drexel University

Title: Does News Media Coverage Influence Strategic Alliance Decisions?

Authors

  • Mazhar Islam, Drexel University
  • Shantanu Dutta, University of Ontario Institute of Technology
  • Pengcheng Zhu, University of San Diego

Abstract: We examine the role of news media coverage on strategic alliances. We argue that news media reduces information asymmetry between a firm and its external constituents and it establishes the reputation of the firm. We expect firms to consider the news media’s portrayal of the partners. Additionally, we expect capital markets to take note of the news media coverage of allying firms. By analyzing approximately 1.4 million news items we find that a firm with negative media coverage is less likely to form an alliance. However when such a firm forms alliance, it does not garner positive abnormal market returns. Finally, we find a firm’s negative media coverage affects the abnormal market returns of its partner positively following the alliance announcement.

Title: Exploring Firms' Perceptions and Entry Mechanisms in BOP Ventures: A Transaction Cost Approach

Authors

  • Shubhabrata Basu, Indian Institute of Management Indore

Abstract: In this paper, I argued that, firms actively seek institutionally weak markets prone to transactional failures, so that they can reduce specific combinations of transaction costs and become sustainably cost competitive. I performed a content analysis coupled with qualitative comparative analysis on a set of reported cases of firms operating at the bottom of the pyramid markets using two apriori constructs drawn from the innovation literature. I found that firms, contrary to received wisdom, tend to perceive the BOP markets more from behavioral uncertainties than infrastructural impediments. Consequently, firms undertake a special type of innovation, which I termed as reconfigurational innovation. Reconfigurational innovation imparts competitive advantages to the firms and trust based sustainability in their relationships with their suppliers/consumers.

Title: Greening with Partners: Environmental Legitimation Through Alliance Formation

Authors

  • Yann Truong, ESC Rennes School of Business
  • Seong-Young Kim, ESC Rennes School of Business

Abstract: In this research, we investigate the conditions under which firms are likely to form an alliance in a highly institutionalized context. We suggest that the higher pressures in such a context normally lead to legitimacy homophily, i.e. high legitimate firms are likely to form alliances with similar counterparts to signal conformance. However, because low legitimate firms endeavor to form alliances with high legitimate partners to increase their own legitimacy, asymmetric alliances may take place under two conditions: When both firms have low visibility; or when the low legitimate partner possesses symbolic assets that signal its intention toward the environment. We intend to support our contentions by collecting data on publicly traded and global firms in the chemistry industry.

Title: Value Creation of Strategic Alliances for Bond Investors

Authors

  • Ian P.L. Kwan, University of Navarra
  • Carmen Aranda, University of Navarra

Abstract: Prior studies find that the formation of strategic alliances creates value for stock holders, but they say nothing about the value created for bond holders. In this study we analogously apply theory of coinsurance from the merger literature to strategic alliances and find that bond holder wealth also increases at the announcement of alliance initiatives. The study is important firstly because it shows that the formation of strategic alliances also creates value for bond investors, a significant investor class not yet studied in the alliance literature. Secondly, it shows a link between firms’ corporate strategies and their cost of debt financing, in particular revealing how leveraged firms may seek to lower their financial risk and hence debt funding cost by strategically engaging in alliances.

All Sessions in Track N...

Sun: 08:00 – 09:15
Session 408: Future Research Directions in Cooperative Strategy
Sun: 11:15 – 12:30
Session 427: Research Methods in Cooperative Strategy
Sun: 15:45 – 17:00
Session 422: Alliance Formation and Stakeholder Perceptions
Sun: 17:15 – 18:30
Session 610: Cooperative Strategies IG Business Meeting
Mon: 08:00 – 09:15
Session 418: The Structure and Evolution of Networks
Session 420: Relational Mechanisms and Governance Choice in Alliances
Mon: 11:00 – 12:15
Session 416: Resource Dependence, Power Relations and Cooperation
Session 423: Alliances and Innovation Performance
Mon: 14:45 – 16:00
Session 424: Partnering Experience, Alliance Governance, and Performance
Session 425: Tradeoffs and Opportunism in Cooperative Relations
Mon: 16:30 – 17:45
Session 419: Cognition and Learning in Alliances
Tue: 08:00 – 09:15
Session 409: Increasing the Relevance of Strategy Research
Session 417: Networks of Competition and Cooperation
Tue: 15:30 – 16:45
Session 421: Acquisitions, Alliances, and Contracts
Tue: 17:15 – 18:30
Session 454: Multipartner Cooperation and Third-Party Relations


Strategic Management Society

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