【公开学术报告】The Extra-dyadic Influence of Acquisitions on Acquirer’s Alliance Partners

Guest Speaker:     Rui Yang (University of California)

Time/Date:          9:30 am Thursday, Sept. 10, 2020 (Beijing Time)

Length:                1.5 hours

Meeting ID:        666 184 41154

Password:            806705

Click Link:            https://zoom.com.cn/j/66618441154

Abstract:

Drawing on Lavie’s (2006) framework on inter-firm relationships, we examine the market valuation effect of an acquisition on the acquirer’s alliance partners. New connections inherited by the acquirer from the target constitute new channels for spillover rents that subsequently flow from the acquirer to the focal partner. Accordingly, we hypothesize that increased spillover rents will generate positive market reactions for the focal partner in response to the acquisition announcement. Moreover, we also consider the focal partner’s bargaining power over the acquirer to appropriate relational rents from the combined firm. By having more advantageous resource connections than the acquirer, the focal partner with stronger bargaining power will receive more resources shared by a weaker acquirer after the acquisition, which we hypothesize will also generate positive market reactions to the focal partner. In addition, we posit that the more the acquirer and target share common alliance partners prior to their merger, the less the inherited connections will create spillover rents for the focal partner because of the redundancy in resource flows between the acquirer and the target. However, the more common partners shared between acquirer and target, the more relational rents the focal partner will appropriate from a relatively weaker acquirer, since the acquirer gains more shareable resources for the focal partner by consolidating more relational rents from the target. Using data from the pharmaceutical industry, we find support for our hypotheses.

Keywords: economic rents, acquisition, alliance, inter-firm relationship, market reactions