Essays on the impact of acquisitions on alliance portfolios and interorganizational dynamics

• Main Author: MA, Jiawen
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: alliances; acquisitions; interorganizational networks; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/etd_coll/570; https://ink.library.smu.edu.sg/context/etd_coll/article/1568/viewcontent/Essays_on_the_Impact_of_Acquisitions_on_Alliance_Portfolios_and_Interorganizational_Dynamics.pdf
• Institution: Singapore Management University

This dissertation investigates the impact of acquisition activities on the current partners of the involved firms and the restructuring of their alliance portfolios. The first essay examines how acquisitions by a firm’s current alliance partners influence this firm’s subsequent alliance formation. The literature suggests that if a focal firm’s current alliance partners acquire targets that are in the same industry as the focal firm, the focal firm would be concerned about these alliance partners’ commitment, their increased bargaining power, and opportunistic behaviors. This essay contends that in response, the focal firm will form alliances with new partners to mitigate concerns about potential reduction in resource capture in its current alliances and to reduce dependence on current partners. This essay also theorizes how the focal firm’s status relative to its partners and its ego network density mitigate this tendency. This essay expands the knowledge about how firms react to alliance partners’ strategic activities. The second essay examines the impact of acquisitions on the economic gains experienced by the common partners of both the acquirer and target firms, as evidenced by market reactions to the announcement of the acquisition. This essay posits that acquisitions have a negative effect on the stock market returns of these common partners, attributed to a decrease in bargaining power. Additionally, this essay proposes that industry relatedness between the acquirer and targets exacerbates the negative impact on common partners' stock market returns, while the number of total common partners and previous alliance experiences between the acquirer and the target lessen the negative returns. This essay enriches the existing literature on acquisitions by providing new insights into implications for third parties and interorganizational relationships. The third essay explores how acquisition premiums influence the acquirers' subsequent alliance formation. It reveals that acquirer firms paying higher acquisition premiums tend to engage in fewer new alliances afterward. However, this tendency diminishes when the relational embeddedness between the acquirer and the target increases, or when the acquirer holds a higher centrality or brokerage position. This essay expands the existing literature on acquisition premiums by shedding light on their influence on acquirers' external interorganizational relationships.