Publications

Paper Num.:
1
Year:
1995
Title:
Market Value Impact of Joint Ventures: The Effect of Industry Information Processing Load
Information:

Notes:

Authors:
R. Madhavan
J. Prescott

PDF File:

Abstract:
Previous studies of the market value impact of announcements of joint ventures have not considered industry effects. We suggest that the impact of such announcements varies with the information-processing load associated with analyzing events in the relevant industry. An event study analysis based on a stratified sample of 108 announcements in three industry groups, one with a light, one with a moderate, and one with a heavy information-processing load (the last category included the steel industry), confirmed this hypothesis. We examine implications for a signaling perspective on joint venture announcements.