View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by DSpace at New York University Measuring the Value of Strategic Alliances in the Wake of a Financial Implosion: Evidence from Japan's Financial Services Sector Ingyu Chiou School of Business Eastern Illinois University 600 Lincoln Avenue Charleston, IL 61920-3099 (217)581-6036 e-mail:
[email protected] Lawrence J. White Leonard Stern School of Business New York University 44 West 4th Street New York, NY 10012-1126 (212)998-0880 e-mail:
[email protected] Draft: 10/8/03 Please do not quote or cite without the permission of the authors We would like to thank Benedicte Reyes, Raj Varma, Yasu Hoshino, and participants in the 2000 Southern Finance Association, 2001 Financial Management Association, and 2002 APFA/PACAP/FMA meetings for helpful comments. Ingyu Chiou gratefully acknowledges a 2001 Summer Research Grant (No. 1-00204) from Eastern Illinois University. We also thank Minyuan Zhoa, Anjela Kniazeva, and Diana Kniazeva for their research assistance. 1 Abstract This paper examines the wealth effects of financial-institution strategic alliances on the shareholders of the newly allied firms. Our paper is different from previous studies of non-financial joint ventures, financial and non-financial mergers and acquisitions, and non-financial strategic alliances in three important aspects/ways: First, we focus on financial institutions that form strategic alliances. Second, while most related studies use U.S. data, this paper employs Japanese data for the late 1990s, directly testing financial theory in a different setting. Finally, we study whether different types of alliances result in differing magnitudes of stock market responses.