A comparative analysis of strategic alliances and acquisition activity: A test of the substitution hypothesis
نویسندگان
چکیده
We provide a comprehensive comparison of strategic alliances and acquisitions, tackling the question of whether these transactions are substitutes or complements. We find evidence that the decision to enter a strategic alliance rather than an acquisition is determined by firm specific characteristics representing risk, CEO remuneration and external corporate governance mechanisms. Strategic alliances also generate significantly different market returns around the announcement date and, again, we find firm and governance characteristics determine these returns. The findings in this paper demonstrate that these transactions are not perfect substitutes.
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