Alliance Formation and Firm Value
| Autor: | Gonçalo Pacheco-de-Almeida, Luis M. B. Cabral |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
Matching (statistics)
050208 finance Strategy and Management 05 social sciences Enterprise value Variance (accounting) Management Science and Operations Research Investment (macroeconomics) Competitive advantage Microeconomics Alliance Skewness 0502 economics and business Value (economics) Economics 050207 economics |
| Zdroj: | Management Science. 65:879-895 |
| ISSN: | 1526-5501 0025-1909 |
| DOI: | 10.1287/mnsc.2017.2954 |
| Popis: | We consider the formation of alliances that potentially create complementarities, that is, when the value function is supermodular in firm resources. We show that, in a frictionless world where information is perfect and managers optimize, firm alliances disproportionately increase the value of high-resource-level firms, resulting in higher variance and higher skewness of the distribution of firm value; moreover, higher-value alliances are subject to regression to the mean at a faster rate. These effects are magnified if the degree of complementarities is endogenously determined by each firm’s investment. We also consider alliances where matching and/or information about firm resources are imperfect, and show that complementarities are a necessary but not sufficient condition for alliances to cause an increase in firm value; and that complementarities are neither a necessary nor a sufficient condition for alliances to be correlated with higher firm value. This paper was accepted by Olav Sorenson, organizations. |
| Databáze: | OpenAIRE |
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