To achieve and sustain competitive advantage, many Korean firms have entered into strategic alliances with other firms, especially technologically-advanced foreign companies. Previous research on market reaction to such alliances, however, shows mixed results. Therefore, the purpose of this thesis is to analyze the effects of the announcement of alliances among established firms in the stock market. Focusing on international strategic technology alliance, this study applied the event study approach and examined the cumulative average abnormal returns (CAAR) for 70 announcements of alliances between Korean firms and foreign firms from 1999 to 2004. This study also aims to determine if research and development (R&D) activities have any influence on company value. Results showed that when Korean firms entered into a technology alliance, the more previous experiences and the lower the partner s country risk, the greater the firm value that is enjoyed. The information technology (IT) industry is more positively influenced by the announcements compared with the automobile and petrochemical industries.
Abstract
Ⅰ. Introduction
Ⅱ. Literature Review
Ⅲ. Data and Methodology
Ⅳ. Results
Ⅴ. CONCLUSION
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