The Choice Between Joint Ventures and Acquisitions: Insights from Signaling Theory

dc.contributor.authorReuer, Jeffrey J.en_US
dc.contributor.authorRagozzino, Robertoen_US
dc.date.accessioned2014-03-21T21:08:33Z
dc.date.available2014-03-21T21:08:33Z
dc.date.created2011-9-28en_US
dc.description.abstractThis paper extends information economics in corporate strategy and organizational governance research by using signaling theory to explain firms' market entry modes. We exploit features of the initial public offering (IPO) context to investigate how signals on newly public firms shape other companies' governance choices to form joint ventures with them versus acquiring them. We also develop theoretical arguments on how the value of these signals will vary across exchange partners. The results reveal that companies are more apt to acquire, versus partner with, IPO firms taken public by reputable investment banks compared with IPO firms associated with less prominent underwriters. Venture capitalist backing also appears to be a valuable signal for prospective acquirers, particularly when the acquirer and target reside in different industries and possess dissimilar knowledge bases. We also present evidence that signals affect target selection and the emergence of market segmentation for joint venture partners and acquisition candidates.en_US
dc.identifier.bibliographicCitationReuer, Jeffrey J., and Roberto Ragozzino. 2012. "The choice between joint ventures and acquisitions: Insights from signaling theory." Organization Science 23(4): 1175-1190.en_US
dc.identifier.issn1047-7039en_US
dc.identifier.issue4en_US
dc.identifier.startpage1175en_US
dc.identifier.urihttp://hdl.handle.net/10735.1/3212
dc.identifier.volume23en_US
dc.relation.urihttp://dx.doi.org/10.1287/orsc.1110.0692en_US
dc.rights© 2012 INFORMSen_US
dc.source.journalOrganization Scienceen_US
dc.subjectConsolidation and merger of corporationsen_US
dc.subjectStrategic alliances (Business)en_US
dc.subjectJoint venturesen_US
dc.titleThe Choice Between Joint Ventures and Acquisitions: Insights from Signaling Theoryen_US
dc.typetexten_US
dc.type.genrearticleen_US

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