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R&D intensity, cross-border strategic alliances, and valuation effects

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  • Owen, Sian
  • Yawson, Alfred

Abstract

This paper examines the role of R&D intensity in cross border strategic alliance formation. Firms can exploit their existing R&D capabilities by entering into overseas markets via strategic alliances. Consistent with our hypothesis, we find R&D intensity to be a major determinant of cross-border strategic alliance decisions involving US firms. R&D intensive firms prefer alliances in Continental Europe and Emerging Asia-Pacific regions. R&D intensity, however, cannot distinguish between the ownership forms of the overseas partner as the firm may not have the opportunity to choose the nature of the partner once the alliance decision has been made. Finally, we examine the valuation effect of cross-border strategic alliance announcements and find the associated wealth effects to be driven primarily by R&D intensity.

Suggested Citation

  • Owen, Sian & Yawson, Alfred, 2015. "R&D intensity, cross-border strategic alliances, and valuation effects," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 35(C), pages 1-17.
    • Handle: RePEc:eee:intfin:v:35:y:2015:i:c:p:1-17
    DOI: 10.1016/j.intfin.2015.01.001
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    Cited by:

    1. Vithessonthi, Chaiporn & Racela, Olimpia C., 2016. "Short- and long-run effects of internationalization and R&D intensity on firm performance," Journal of Multinational Financial Management, Elsevier, vol. 34(C), pages 28-45.
    2. Vithessonthi, Chaiporn, 2017. "Capital investment and internationalization," Journal of Economics and Business, Elsevier, vol. 90(C), pages 31-48.
    3. Li, Wanli & Zhang, Xinyue, 2023. "Green innovation and cross-border strategic alliance announcements: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).

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    More about this item

    Keywords

    Strategic alliances; R&D investment; Geographical locations; Partner selection; Valuation effect;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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