{"title":"Unlocking strategic alliances: The role of common institutional blockholders in promoting collaboration and trust","authors":"Thomas J. Chemmanur , Yao Shen , Jing Xie","doi":"10.1016/j.jfs.2024.101350","DOIUrl":null,"url":null,"abstract":"<div><div>This paper investigates the role of common institutional blockholders (CIBs) in promoting strategic alliances and facilitating the transfer of human capital between alliance partner firms. We find that firms are more likely to form strategic alliances (including research and development (R&D), licensing, manufacturing, and marketing alliances) when they share CIBs with a larger proportion of their industry peers. To establish a causal relationship, we exploit the exogenous shocks to CIB ownership induced by annual Russell 1000/2000 index reconstitutions. Our firm-pair-level analysis indicates that two firms are more likely to form alliances when they share a CIB. Additionally, we show that R&D alliance partner firms connected through CIBs exhibit greater across-partner redeployment of R&D-related human capital than partner firms without CIB connections. Overall, our findings underscore the significance of common institutional blockholder ownership in reducing the distrust that hinders strategic alliance formation and in realizing the economic benefits of such alliances.</div></div>","PeriodicalId":48027,"journal":{"name":"Journal of Financial Stability","volume":"76 ","pages":"Article 101350"},"PeriodicalIF":6.1000,"publicationDate":"2024-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Financial Stability","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1572308924001359","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This paper investigates the role of common institutional blockholders (CIBs) in promoting strategic alliances and facilitating the transfer of human capital between alliance partner firms. We find that firms are more likely to form strategic alliances (including research and development (R&D), licensing, manufacturing, and marketing alliances) when they share CIBs with a larger proportion of their industry peers. To establish a causal relationship, we exploit the exogenous shocks to CIB ownership induced by annual Russell 1000/2000 index reconstitutions. Our firm-pair-level analysis indicates that two firms are more likely to form alliances when they share a CIB. Additionally, we show that R&D alliance partner firms connected through CIBs exhibit greater across-partner redeployment of R&D-related human capital than partner firms without CIB connections. Overall, our findings underscore the significance of common institutional blockholder ownership in reducing the distrust that hinders strategic alliance formation and in realizing the economic benefits of such alliances.
期刊介绍:
The Journal of Financial Stability provides an international forum for rigorous theoretical and empirical macro and micro economic and financial analysis of the causes, management, resolution and preventions of financial crises, including banking, securities market, payments and currency crises. The primary focus is on applied research that would be useful in affecting public policy with respect to financial stability. Thus, the Journal seeks to promote interaction among researchers, policy-makers and practitioners to identify potential risks to financial stability and develop means for preventing, mitigating or managing these risks both within and across countries.