An Inquiry Into The Effects Of Strategic Alliance On Stock Price And Long-Run Risk Performance

The research adopts the analysis concept by event analysis & regression to investigate whether the strategic alliance could enhance the wealth of shareholder. The samples are the Taiwanese companies who have strategic alliance between 2000 and 2005.The empirical result based on event analysis method is that the short-term share prices go up significantly when strategic alliances are announced. And the accumulated abnormal rates of return are all positive.However, in the long-run, only the share prices of the electronic companies with foreign strategic alliances go up. The share prices of the rest of other companies are not significantly influenced. The reason is that the electronic industry is a technology-intensive industry. Hence, the investors grant extremely high evaluation and expectations by hoping the increasing research ability by those companies with foreign strategic alliances.Based ok regression research, it shows that the total manager's shareholdings, the square of the individual manager's holding percentages and the share prices of the Taiwanese listed companies with strategic alliances have abnormally significant rates of return. Hence, the holding percentages of managers could influence dramatically to rates of return of the investors.In addition, the related long-run risk correlation research, mainly analyzes the shareholder rights and holding stock anticipated returns. This research adopts the analysis pattern by Healy & Palepu (1990), the Taiwan area carries on the strategy alliance firm, from 2000 to 2005, the materials to carry on the empirical analysis. The empirical result discovered that, three years after the company announced the strategy alliance, the shareholder rights of risk were significantly reduced. Simultaneously industry compared with the whole, the shareholder rights and interests reward rate is higher than the whole industry level. In view of the long time the stock holding empirical analysis result of the future, its stock returns at present reveals that no matter the median value or the mean Value will be at least 1% more than the standard of the industry level. Above two conforms to supposition of this research, explaining the strategy alliance in reducing the tendency of long-run risk, simultaneously also has the improvement to the long-run business operation risk tendency.Above the synthesis analyzes, may obtain a conclusion, the strategy allianceannounced that around one day comes the abnormal returns to the stock price, but in the future month its effect certainly will not reveal. But says for a long time, the shareholder rights and interests risk and the stock holding risk has the obvious drop in the long-run risk tendency. As this empirical analysis result and Chan et al, Kale et al the many scholars' conclusions tally, the strategy alliance firm will be allowed to provide the manager and shareholder in accordance to the adjustment strategy. As for the policy-maker, this provides a desire to be engaged in the strategy alliance firm to convince the board of directors the objective.