Stock market views of corporate multinationalism: some evidence from announcements of international joint ventures

Chung, Il Yung; Koford, Kenneth; Lee, Insup

doi:10.1016/1062-9769(93)90015-c

Cited by 55 publications

(31 citation statements)

References 16 publications

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“…On the other hand, Chung et al (1993) found announcements of international joint ventures by US firms had a negative effect on US firm values. Possible explanations for the negative wealth effect are fears regarding victimisation by hostile partners, diffusion of high-technologies and management conflicts (Chung et al, 1993).…”

Section: Previous Studies Of Capital Investment Announcementsmentioning

confidence: 99%

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Company Investment Announcements and the Market Value of the Firm

Jones

2000

SSRN Journal

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This paper examines the stock market reaction to 402 company investment announcements made by UK companies during the 1991-1996 period. The marketadjusted abnormal returns are generally positive but small. Investment announcements are classified according to functional categories, and we find the level of abnormal returns to vary according to the type of capital investment being announced. In particular, we find the market to react more favourably to investments which 'create' future investment opportunities, than to investments which can be categorised as 'exercising' investment opportunities. The market reaction also varies with firm size, with large companies tending to experience smaller responses to announcements than do smaller firms. Chung et al. (1998) reported that the quality of a company's investment opportunities is the primary determinant of market reactions to capital expenditure decisions. Our findings lend some support to a role for investment opportunities in market valuations. We also find project size to have a significant positive impact on the level of abnormal returns.2

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Section: Previous Studies Of Capital Investment Announcementsmentioning

confidence: 99%

“…Possible explanations for the negative wealth effect are fears regarding victimisation by hostile partners, diffusion of high-technologies and management conflicts (Chung et al, 1993).…”

Section: Previous Studies Of Capital Investment Announcementsmentioning

confidence: 99%

Company Investment Announcements and the Market Value of the Firm

Jones

2000

SSRN Journal

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“…But, Finnerty et al (1986), among others, found no significant difference in market values. Still others have shown that the market value of US firms decreased when JVs were formed with international partners (Lee and Wyatt, 1990;Chung et al, 1993). 2 Many of the samples used in this body of empirical research include only one partner in the JV or, in the case of international JVs, just the US partner.…”

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confidence: 99%

Firm resources and joint ventures: what determines zero‐sum versus positive‐sum outcomes?

Wolff

Reed

2000

Manage Decis Econ

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In this study, we are concerned with the resources that are brought to joint ventures, and whether or not the way in which those resources are combined can improve parent-firm performance. We are also interested in whether or not the exposure of valuable resources through the permeable membrane of the joint venture can have an adverse effect on performance. These questions are explored using a sample of 74 domestic, dyadic joint ventures, and our findings suggest that the strategy can have zero-sum and positive-sum outcomes. Copyright © 2000 John Wiley & Sons, Ltd.

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“…They found JV announcements to be associated with small but significant positive abnormal returns, as did McConnell and Nantell (1985), Woolridge and Snow (1990) and . found JVs to be associated with higher abnormal returns than single company investments, although Chung et al (1993) found international JVs to be associated with negative abnormal returns. While the extant literature is somewhat inconclusive, based on the theoretical predictions of Burton et al, we hypothesise that JVs will have a positive impact on the level of abnormal returns.…”

Section: Cross-sectional Analysismentioning

confidence: 82%