Stock market and network influence on alliance formation: evidence from the biopharmaceutical industry

Sudha Mani, Prabakar Kothandaraman, Rajiv Kashyap, Bahar Ashnai

Research output: Contribution to journalArticleResearchpeer-review

Abstract

In this article we posit that firms signal resource availability (stock returns and risk) and favorable reputation (network of ties) to attract alliance partners. We use stock market and network characteristics to predict a firms’ propensity to engage in product alliances. Using 1,877 observations of 302 biopharmaceutical firms over a twenty-year period, we find that increase in stock returns and a decrease in stock risk is associated with an increase in firms’ product alliances. The position of the firm in its network improves product alliance formation, whereas the structure of the overall network (density) has no such effect.

Original languageEnglish
Pages (from-to)69-85
Number of pages17
JournalJournal of Marketing Theory and Practice
Volume25
Issue number1
DOIs
Publication statusPublished - 2 Jan 2017
Externally publishedYes

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