Chapter2004

SIZE OF THE PIE AND SHARE OF THE PIE: IMPLICATIONS OF NETWORK EMBEDDEDNESS AND BUSINESS RELATEDNESS FOR VALUE CREATION AND VALUE APPROPRIATION IN JOINT VENTURES

80 citations0/0 files storedResearch in the sociology of organizations

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Business Strategy and Innovation Corporate Finance and Governance Innovation and Knowledge Management

Abstract

This chapter examines the factors that may influence the total value created in a joint venture (JV) and also the relative value appropriated by each partner in the venture. We look at the effects of both partners’ embeddedness in prior networks of relationships and the asymmetry of business relatedness of two partners with the JV on these two important outcomes. Results of an event study of stock market reaction to JV announcements by the largest U.S. firms during 1987–1996 suggest that both network embeddedness of partners and the asymmetry of business relatedness of two firms with the JV affect the total value creation of all partners but not the relative value appropriation between the partners.

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References

1990Absorptive Capacity: A New Perspective on Learning and Innovation 1985Economic Action and Social Structure: The Problem of Embeddedness 1988Social Capital in the Creation of Human Capital 1991Exploration and Exploitation in Organizational Learning 2000Social Capital in the Creation of Human Capital 1981The Evolution of Cooperation 1970EFFICIENT CAPITAL MARKETS: A REVIEW OF THEORY AND EMPIRICAL WORK*1970Efficient Capital Markets: A Review of Theory and Empirical Work

Cited by

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