CAN ALLIANCES SUBSTITUTE ACQUISITIONS? THE EVIDENCE FROM A QUASI-EXPERIMENT

Jaemin Lee; Joon Mahn Lee

doi:10.5465/AMBPP.2021.21

CAN ALLIANCES SUBSTITUTE ACQUISITIONS? THE EVIDENCE FROM A QUASI-EXPERIMENT

Jaemin Lee, Joon Mahn Lee

Research output: Contribution to conference › Paper › peer-review

Abstract

We utilize a quasi-experimental setting that exogenously changes costs to acquire the targeted firm to examine the relationship between costs to acquire the target and alliance decisions. We find that firms with increased acquisition costs, due to the increased takeover protection, tend to experience alliances more than their comparison group. Furthermore, we examine boundary conditions for this relationship-intra-industry transaction and resource redeployability. Our analyses also reveal that, when the costs of acquisition increase, 1) equity alliances are more likely to be adopted as a substitute; 2) acquisitions become less likely; 3) alliance performance decreases; and 4) acquisition premiums increase.

Original language	English
DOIs	https://doi.org/10.5465/AMBPP.2021.21
Publication status	Published - 2021
Event	81st Annual Meeting of the Academy of Management 2021: Bringing the Manager Back in Management, AoM 2021 - Virtual, Online Duration: 2021 Jul 29 → 2021 Aug 4

Conference

Conference	81st Annual Meeting of the Academy of Management 2021: Bringing the Manager Back in Management, AoM 2021
City	Virtual, Online
Period	21/7/29 → 21/8/4

Bibliographical note

Publisher Copyright:
© AoM 2021.All right reserved.

ASJC Scopus subject areas

Industrial relations
Management Information Systems
Management of Technology and Innovation

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.5465/AMBPP.2021.21

Cite this

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title = "CAN ALLIANCES SUBSTITUTE ACQUISITIONS? THE EVIDENCE FROM A QUASI-EXPERIMENT",

abstract = "We utilize a quasi-experimental setting that exogenously changes costs to acquire the targeted firm to examine the relationship between costs to acquire the target and alliance decisions. We find that firms with increased acquisition costs, due to the increased takeover protection, tend to experience alliances more than their comparison group. Furthermore, we examine boundary conditions for this relationship-intra-industry transaction and resource redeployability. Our analyses also reveal that, when the costs of acquisition increase, 1) equity alliances are more likely to be adopted as a substitute; 2) acquisitions become less likely; 3) alliance performance decreases; and 4) acquisition premiums increase.",

author = "Jaemin Lee and Lee, {Joon Mahn}",

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AU - Lee, Jaemin

AU - Lee, Joon Mahn

PY - 2021

Y1 - 2021

N2 - We utilize a quasi-experimental setting that exogenously changes costs to acquire the targeted firm to examine the relationship between costs to acquire the target and alliance decisions. We find that firms with increased acquisition costs, due to the increased takeover protection, tend to experience alliances more than their comparison group. Furthermore, we examine boundary conditions for this relationship-intra-industry transaction and resource redeployability. Our analyses also reveal that, when the costs of acquisition increase, 1) equity alliances are more likely to be adopted as a substitute; 2) acquisitions become less likely; 3) alliance performance decreases; and 4) acquisition premiums increase.

AB - We utilize a quasi-experimental setting that exogenously changes costs to acquire the targeted firm to examine the relationship between costs to acquire the target and alliance decisions. We find that firms with increased acquisition costs, due to the increased takeover protection, tend to experience alliances more than their comparison group. Furthermore, we examine boundary conditions for this relationship-intra-industry transaction and resource redeployability. Our analyses also reveal that, when the costs of acquisition increase, 1) equity alliances are more likely to be adopted as a substitute; 2) acquisitions become less likely; 3) alliance performance decreases; and 4) acquisition premiums increase.

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U2 - 10.5465/AMBPP.2021.21

DO - 10.5465/AMBPP.2021.21

M3 - Paper

AN - SCOPUS:85123481058

T2 - 81st Annual Meeting of the Academy of Management 2021: Bringing the Manager Back in Management, AoM 2021

Y2 - 29 July 2021 through 4 August 2021

ER -

CAN ALLIANCES SUBSTITUTE ACQUISITIONS? THE EVIDENCE FROM A QUASI-EXPERIMENT

Abstract

Conference

Bibliographical note

ASJC Scopus subject areas

UN SDGs

Access to Document

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