IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v171y2024ics0148296323007543.html
   My bibliography  Save this article

Impact of ESG distinctiveness in alliances on shareholder value

Author

Listed:
  • Iurkov, Viacheslav
  • Koval, Mariia
  • Misra, Shekhar
  • Pedada, Kiran
  • Sinha, Ashish

Abstract

Prior research documents that strategic alliances help firms create shareholder value by gaining access to partner’s complementary marketing and technology resources. Apart from these resources, we argue that firms can also access reputational assets of their alliance partner, based on the partner’s Environmental, Social, and Governance (ESG) performance. However, the alliance literature overlooks the effect of partner’s ESG performance on shareholder value creation. In the present study, we build on the knowledge differentials logic to propose that deviations in a firm’s ESG-specific knowledge and expertise compared to those of its alliance partner—what we term “ESG distinctiveness”—can affect a firm’s shareholder value. Using data on alliance formation announcements by public U.S. firms between 2003 and 2020, we find that firms gain value from forming alliances with high ESG performance partners. The effect of ESG distinctiveness on shareholder value due to alliance formation is stronger for firms with greater prior partnering experience.

Suggested Citation

  • Iurkov, Viacheslav & Koval, Mariia & Misra, Shekhar & Pedada, Kiran & Sinha, Ashish, 2024. "Impact of ESG distinctiveness in alliances on shareholder value," Journal of Business Research, Elsevier, vol. 171(C).
    • Handle: RePEc:eee:jbrese:v:171:y:2024:i:c:s0148296323007543
    DOI: 10.1016/j.jbusres.2023.114395
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296323007543
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2023.114395?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yu Liu & T. Ravichandran, 2015. "Alliance Experience, IT-Enabled Knowledge Integration, and Ex Ante Value Gains," Organization Science, INFORMS, vol. 26(2), pages 511-530, April.
    2. Sarah E. Wolfolds & Jordan Siegel, 2019. "Misaccounting for endogeneity: The peril of relying on the Heckman two‐step method without a valid instrument," Strategic Management Journal, Wiley Blackwell, vol. 40(3), pages 432-462, March.
    3. Olivier Bertrand & Marie-Ann Betschinger & Caterina Moschieri, 2021. "Are firms with foreign CEOs better citizens? A study of the impact of CEO foreignness on corporate social performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(3), pages 525-543, April.
    4. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    5. Tatiana Kostova & Sjoerd Beugelsdijk & W. Richard Scott & Vincent E. Kunst & Chei Hwee Chua & Marc Essen, 2020. "The construct of institutional distance through the lens of different institutional perspectives: Review, analysis, and recommendations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 467-497, June.
    6. Francisco Polidoro & Curba Morris Lampert & Minyoung Kim, 2022. "External knowledge sourcing, knowledge spillovers, and internal collaboration: The effects of intrafirm linkages on firm‐university co‐authorship linkages," Strategic Management Journal, Wiley Blackwell, vol. 43(13), pages 2742-2776, December.
    7. Antonio Messeni Petruzzelli & Gianluca Murgia, 2020. "University–Industry collaborations and international knowledge spillovers: a joint-patent investigation," The Journal of Technology Transfer, Springer, vol. 45(4), pages 958-983, August.
    8. Steffen Runge & Christian Schwens & Matthias Schulz, 2022. "The invention performance implications of coopetition: How technological, geographical, and product market overlaps shape learning and competitive tension in R&D alliances," Strategic Management Journal, Wiley Blackwell, vol. 43(2), pages 266-294, February.
    9. Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
    10. Mooi, Erik & Wuyts, Stefan, 2021. "Value from technology licensing – The role of monitoring and licensing experience," International Journal of Research in Marketing, Elsevier, vol. 38(4), pages 1034-1054.
    11. Bouncken, Ricarda B. & Ratzmann, Martin & Kraus, Sascha, 2021. "Anti-aging: How innovation is shaped by firm age and mutual knowledge creation in an alliance," Journal of Business Research, Elsevier, vol. 137(C), pages 422-429.
    12. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    13. Brian W. Jacobs & Vinod R. Singhal, 2020. "Shareholder Value Effects of the Volkswagen Emissions Scandal on the Automotive Ecosystem," Production and Operations Management, Production and Operations Management Society, vol. 29(10), pages 2230-2251, October.
    14. Xavier Martin & Will Mitchell & Anand Swaminathan, 1995. "Recreating and extending Japanese automobile buyer'supplier links in north America," Strategic Management Journal, Wiley Blackwell, vol. 16(8), pages 589-619.
    15. Markovitch, Dmitri G. & Huang, Dongling & Ye, Pengfei, 2020. "Marketing intensity and firm performance: Contrasting the insights based on actual marketing expenditure and its SG&A proxy," Journal of Business Research, Elsevier, vol. 118(C), pages 223-239.
    16. Kartik Kalaignanam & Venkatesh Shankar & Rajan Varadarajan, 2007. "Asymmetric New Product Development Alliances: Win-Win or Win-Lose Partnerships?," Management Science, INFORMS, vol. 53(3), pages 357-374, March.
    17. Bouncken, Ricarda B. & Fredrich, Viktor & Kraus, Sascha & Ritala, Paavo, 2020. "Innovation alliances: Balancing value creation dynamics, competitive intensity and market overlap," Journal of Business Research, Elsevier, vol. 112(C), pages 240-247.
    18. Maurizio Zollo & Jeffrey J. Reuer & Harbir Singh, 2002. "Interorganizational Routines and Performance in Strategic Alliances," Organization Science, INFORMS, vol. 13(6), pages 701-713, December.
    19. ANITA M. McGAHAN & MICHAEL E. PORTER, 1997. "How Much Does Industry Matter, Really?," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 15-30, July.
    20. Carhart, Mark M, 1997. "On Persistence in Mutual Fund Performance," Journal of Finance, American Finance Association, vol. 52(1), pages 57-82, March.
    21. Jeffrey H. Dyer & Harbir Singh & William S. Hesterly, 2018. "The relational view revisited: A dynamic perspective on value creation and value capture," Strategic Management Journal, Wiley Blackwell, vol. 39(12), pages 3140-3162, December.
    22. Richard J. Arend, 2009. "Reputation for cooperation: contingent benefits in alliance activity," Strategic Management Journal, Wiley Blackwell, vol. 30(4), pages 371-385, April.
    23. Eni Gambeta & Balaji R. Koka & Robert E. Hoskisson, 2019. "Being too good for your own good: A stakeholder perspective on the differential effect of firm‐employee relationships on innovation search," Strategic Management Journal, Wiley Blackwell, vol. 40(1), pages 108-126, January.
    24. Messeni Petruzzelli, Antonio, 2019. "Trading knowledge for status: Conceptualizing R&D alliance formation to achieve ambidexterity," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 36-42.
    25. Federica Farneti & James Guthrie, 2009. "Sustainability reporting by Australian public sector organisations: Why they report," Accounting Forum, Taylor & Francis Journals, vol. 33(2), pages 89-98, June.
    26. Farneti, Federica & Guthrie, James, 2009. "Sustainability reporting by Australian public sector organisations: Why they report," Accounting forum, Elsevier, vol. 33(2), pages 89-98.
    27. Narasimhan Jegadeesh & Sheridan Titman, 2001. "Profitability of Momentum Strategies: An Evaluation of Alternative Explanations," Journal of Finance, American Finance Association, vol. 56(2), pages 699-720, April.
    28. Caroline Flammer, 2015. "Does Corporate Social Responsibility Lead to Superior Financial Performance? A Regression Discontinuity Approach," Management Science, INFORMS, vol. 61(11), pages 2549-2568, November.
    29. Mani, Sudha & Luo, Xueming, 2015. "Product alliances, alliance networks, and shareholder value: Evidence from the biopharmaceutical industry," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 9-22.
    30. Pushpika Vishwanathan & Hans (J.) van Oosterhout & Pursey P. M. A. R. Heugens & Patricio Duran & Marc van Essen, 2020. "Strategic CSR: A Concept Building Meta‐Analysis," Journal of Management Studies, Wiley Blackwell, vol. 57(2), pages 314-350, March.
    31. Saeed Janani & Ranjit M. Christopher & Atanas Nik Nikolov & Michael A. Wiles, 2022. "Marketing experience of CEOs and corporate social performance," Journal of the Academy of Marketing Science, Springer, vol. 50(3), pages 460-481, May.
    32. Melissa A. Schilling, 2009. "Understanding the alliance data," Strategic Management Journal, Wiley Blackwell, vol. 30(3), pages 233-260, March.
    33. Richard F. J. Haans & Constant Pieters & Zi-Lin He, 2016. "Thinking about U: Theorizing and testing U- and inverted U-shaped relationships in strategy research," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1177-1195, July.
    34. Julija N. Mell & Daan van Knippenberg & Wendy P. van Ginkel & Pursey P. M. A. R. Heugens, 2022. "From Boundary Spanning to Intergroup Knowledge Integration: The Role of Boundary Spanners’ Metaknowledge and Proactivity," Journal of Management Studies, Wiley Blackwell, vol. 59(7), pages 1723-1755, November.
    35. Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
    36. Gautam Ahuja & Francisco Polidoro & Will Mitchell, 2009. "Structural homophily or social asymmetry? The formation of alliances by poorly embedded firms," Strategic Management Journal, Wiley Blackwell, vol. 30(9), pages 941-958, September.
    37. Dovev Lavie, 2007. "Alliance portfolios and firm performance: A study of value creation and appropriation in the U.S. software industry," Strategic Management Journal, Wiley Blackwell, vol. 28(12), pages 1187-1212, December.
    38. Amy J. Hillman & Gerald D. Keim, 2001. "Shareholder value, stakeholder management, and social issues: what's the bottom line?," Strategic Management Journal, Wiley Blackwell, vol. 22(2), pages 125-139, February.
    39. Lorenzo Ardito & Antonio Messeni Petruzzelli & Federica Pascucci & Enzo Peruffo, 2019. "Inter‐firm R&D collaborations and green innovation value: The role of family firms' involvement and the moderating effects of proximity dimensions," Business Strategy and the Environment, Wiley Blackwell, vol. 28(1), pages 185-197, January.
    40. Linda Thorne & Lois S. Mahoney & Kristen Gregory & Susan Convery, 2017. "A Comparison of Canadian and U.S. CSR Strategic Alliances, CSR Reporting, and CSR Performance: Insights into Implicit–Explicit CSR," Journal of Business Ethics, Springer, vol. 143(1), pages 85-98, June.
    41. Ranjay Gulati & Dovev Lavie & Harbir Singh, 2009. "The nature of partnering experience and the gains from alliances," Strategic Management Journal, Wiley Blackwell, vol. 30(11), pages 1213-1233, November.
    42. Hemant Merchant & Dan Schendel, 2000. "How do international joint ventures create shareholder value?," Strategic Management Journal, Wiley Blackwell, vol. 21(7), pages 723-737, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dovev Lavie & Randi Lunnan & Binh Minh T. Truong, 2022. "How does a partner's acquisition affect the value of the firm's alliance with that partner?," Strategic Management Journal, Wiley Blackwell, vol. 43(9), pages 1897-1926, September.
    2. Koval, Mariia & Iurkov, Viacheslav & Benito, Gabriel R.G., 2024. "The interplay of international alliance and subsidiary portfolios: Implications for firms’ innovation and financial performance," Journal of World Business, Elsevier, vol. 59(1).
    3. Steffen Runge & Christian Schwens & Matthias Schulz, 2022. "The invention performance implications of coopetition: How technological, geographical, and product market overlaps shape learning and competitive tension in R&D alliances," Strategic Management Journal, Wiley Blackwell, vol. 43(2), pages 266-294, February.
    4. Akbar Zaheer & Exequiel Hernandez & Sanjay Banerjee, 2010. "Prior Alliances with Targets and Acquisition Performance in Knowledge-Intensive Industries," Organization Science, INFORMS, vol. 21(5), pages 1072-1091, October.
    5. Yi-Ju Lo & Tung M. Hung, 2017. "Is a powerful rival a right partner?," Review of Managerial Science, Springer, vol. 11(3), pages 661-690, July.
    6. Kavusan, K., 2015. "Essays on capability development through alliances," Other publications TiSEM 8eb736a5-b217-4718-ac13-d, Tilburg University, School of Economics and Management.
    7. André Laplume & Kent Walker & Zhou Zhang & Xin Yu, 2021. "Incumbent Stakeholder Management Performance and New Entry," Journal of Business Ethics, Springer, vol. 174(3), pages 629-644, December.
    8. Cabaleiro, Goretti, 2019. "Sources of appropriation capacity in licensing agreements," Technovation, Elsevier, vol. 86, pages 48-61.
    9. Chengguang Li & Jeffrey J. Reuer, 2022. "The impact of corruption on market reactions to international strategic alliances," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(1), pages 187-202, February.
    10. Pankaj Kumar & Xiaojin Liu & Akbar Zaheer, 2022. "How much does the firm's alliance network matter?," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1433-1468, August.
    11. Bae, Joonhyung & Ozmel, Umit, 2024. "The interplay between product development failures and alliance portfolio properties in the formation of exploration versus exploitation alliances," Journal of Business Research, Elsevier, vol. 177(C).
    12. Müller, Dirk, 2010. "Alliance Coordination, Dysfunctions, and the Protection of Idiosyncratic Knowledge in Strategic Learning Alliances," EconStor Preprints 41039, ZBW - Leibniz Information Centre for Economics.
    13. Olivier Meier & Philippe Naccache & Guillaume Schier, 2021. "Exploring the Curvature of the Relationship Between HRM–CSR and Corporate Financial Performance," Journal of Business Ethics, Springer, vol. 170(4), pages 857-873, May.
    14. Hui-Ju Tsai & Yangru Wu, 2022. "Changes in Corporate Social Responsibility and Stock Performance," Journal of Business Ethics, Springer, vol. 178(3), pages 735-755, July.
    15. Vivek Tandon & Navid Asgari & Ram Ranganathan, 2023. "Divestment of relational assets following acquisitions: Evidence from the biopharmaceutical industry," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 1013-1052, April.
    16. She‐Chih Chiu & Hsuan‐Chu Lin & Chuan‐San Wang, 2017. "The Impact of Investments in Pollution Reduction on Shareholder Wealth: Evidence from Taiwanese Manufacturing Companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(6), pages 676-691, November.
    17. Vikas A. Aggarwal, 2020. "Resource congestion in alliance networks: How a firm's partners’ partners influence the benefits of collaboration," Strategic Management Journal, Wiley Blackwell, vol. 41(4), pages 627-655, April.
    18. Nukhet Harmancioglu & David A. Griffith & Tuba Yılmaz, 2019. "Short- and long-term market returns of international codevelopment alliances of new products," Journal of the Academy of Marketing Science, Springer, vol. 47(5), pages 939-959, September.
    19. Guo Li & Na Li & Suresh P. Sethi, 2021. "Does CSR Reduce Idiosyncratic Risk? Roles of Operational Efficiency and AI Innovation," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2027-2045, July.
    20. Dutordoir, Marie & Strong, Norman C. & Sun, Ping, 2018. "Corporate social responsibility and seasoned equity offerings," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 158-179.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:171:y:2024:i:c:s0148296323007543. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.