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The effect of code-sharing alliance formations and terminations on firm value : The role of co-specialization and scope extension

Author

Listed:
  • Ulrich Wassmer

    (EM - EMLyon Business School)

  • Pierre-Xavier Meschi

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)

Abstract

This paper examines how alliance co-specialization and scope extension affect firm value at the time of alliance formation and termination, and whether value creation upon alliance formation also explains value creation upon termination. Building on the relational view of the firm, we develop predictions that are tested using event study methodology and data on code-sharing alliances formed, extended, and terminated between 1994 and 2008. The findings suggest that from a stock market perspective alliance formation and termination can be seen as two interrelated events and that it is difficult to reverse initial valuations past the alliance formation phase. They also suggest that the stock market reacts to alliance formation more critically than to post-formation decisions such as alliance scope extensions and terminations.

Suggested Citation

  • Ulrich Wassmer & Pierre-Xavier Meschi, 2011. "The effect of code-sharing alliance formations and terminations on firm value : The role of co-specialization and scope extension," Post-Print hal-02313046, HAL.
    • Handle: RePEc:hal:journl:hal-02313046
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    Cited by:

    1. Min, Hokey & Joo, Seong-Jong, 2016. "A comparative performance analysis of airline strategic alliances using data envelopment analysis," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 99-110.
    2. Yaghoub Abdi & Xiaoni Li & Xavier Càmara-Turull, 2023. "Firm value in the airline industry: perspectives on the impact of sustainability and Covid-19," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-24, December.
    3. Castiglioni, Marco & Gallego, à ngeles & Galán, José Luis, 2018. "The virtualization of the airline industry: A strategic process," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 134-145.
    4. Cobeña, Mar & Gallego, à ngeles & Casanueva, Cristóbal, 2019. "Diversity in airline alliance portfolio configuration," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 16-26.
    5. Never, Jan & Suau-Sanchez, Pere, 2020. "Challenging the interline and codeshare legacy: Drivers and barriers for airline adoption of airport facilitated inter-airline network connectivity schemes," Research in Transportation Economics, Elsevier, vol. 79(C).
    6. See, Kok Fong & Rashid, Azwan Abdul & Yu, Ming-Miin, 2024. "Measuring the network capacity utilization, energy consumption and environmental inefficiency of global airlines," Energy Economics, Elsevier, vol. 132(C).
    7. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).

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