Evidence on Value Creation in the Financial Services Industries Through the Use of Joint Ventures and Strategic Alliances

Posted: 4 Oct 2003

See all articles by Kimberly C. Gleason

Kimberly C. Gleason

American University of Sharjah

Ike Mathur

Southern Illinois University at Carbondale - Department of Finance

Roy A. Wiggins

Bentley University - Department of Finance

Abstract

While an extensive body of literature has examined merger, acquisition, and consolidation activity in commercial banks and other financial services firms, little attention has been paid to examining how these institutions use the cooperative activities of joint ventures and strategic alliances to accomplish their growth objectives. We analyze the effects of the use of joint ventures and strategic alliances by a sample of firms in the banking, investment services, and insurance industries. Our results show that commercial banks, investment services firms, and insurance companies experience significant abnormal returns of 0.66% on average when they announce their participation in a joint venture or strategic alliance. These abnormal returns are significantly positive across the four strategic motives of domestic, international, horizontal and diversifying cooperative activities. Using a matched sample, we also show that our sample firms enjoy significant, positive, abnormal returns for holding periods of six, 12, and 18 months after the announcement of the cooperative activity.

Suggested Citation

Gleason, Kimberly C. and Mathur, Ike and Wiggins, Roy A., Evidence on Value Creation in the Financial Services Industries Through the Use of Joint Ventures and Strategic Alliances. Available at SSRN: https://ssrn.com/abstract=395885

Kimberly C. Gleason

American University of Sharjah ( email )

P.O. Box 26666
Sharjah
United Arab Emirates

Ike Mathur (Contact Author)

Southern Illinois University at Carbondale - Department of Finance ( email )

Mailcode 4626
Carbondale, IL 62901-4626
United States
618-453-1421 (Phone)
618-453-5626 (Fax)

Roy A. Wiggins

Bentley University - Department of Finance ( email )

175 Forest Street
Waltham, MA 02154
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,358
PlumX Metrics