We treat the sudden technology sector crash as a natural experiment to investigate how dramatic changes in resource availability in the e-commerce sector affect stock market response to interfirm alliances. This environmental jolt demarcated two distinctly different periods of ecommerce resource munificence: pre-crash, characterized by high munificence, and post-crash, characterized by low munificence. Using data on alliances involving 75 e-commerce firms from 1995 to 2001, we find that the stock market responds more favorably to alliances during the less munificent period. Further, stock market response to alliance partner and type is also affected by the change in environmental munificence between the two periods. Our findings demonstrate the importance of environmental conditions and how these affect stock market interpretation of signals inherent in alliance announcements.

This study relies on the resource-based view to examine how alliances of e-commerce firms affect firm value in an emerging business sector. Using an event study method, we investigate 272 alliances of 69 e-commerce firms. Our findings show that alliances of e-commerce firms in general have a positive effect on firm value. Unlike previous studies of alliances, we find that marketing alliances generate significantly greater firm value than technology alliances. Our results also show that alliances with other e-commerce partners do not have a significantly different effect on firm value than alliances with bricks-and-mortar partners. Implications and avenues for future research are discussed.

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