TY - JOUR
T1 - More resources are better? Strategic alliance involvement and cost stickiness
AU - Chen, Wenrui
AU - Hong, Yun
AU - Liu, Xinghe
AU - Xu, Cheng
AU - Gao, Jun
N1 - Publisher Copyright:
© 2023
PY - 2024/1
Y1 - 2024/1
N2 - Utilizing a sample of Chinese listed firms from 2007 to 2020, we document that cost asymmetry behavior is amplified when firms engage in alliance activities. The main effect is more pronounced for firms facing higher adjustment costs, pronounced agency problems, and those led by particularly optimistic managers. Additional analyses suggest that the presence in alliances augments cost stickiness, especially when alliance members come from diverse industries, are significantly larger in scale, or are situated in different geographical regions. The results offer fresh insights into how strategic alliances influence firms’ resource adjustment decisions.
AB - Utilizing a sample of Chinese listed firms from 2007 to 2020, we document that cost asymmetry behavior is amplified when firms engage in alliance activities. The main effect is more pronounced for firms facing higher adjustment costs, pronounced agency problems, and those led by particularly optimistic managers. Additional analyses suggest that the presence in alliances augments cost stickiness, especially when alliance members come from diverse industries, are significantly larger in scale, or are situated in different geographical regions. The results offer fresh insights into how strategic alliances influence firms’ resource adjustment decisions.
KW - Adjustment costs
KW - Agency problem
KW - Cost stickiness
KW - Managerial expectation
KW - Strategic alliance
UR - http://www.scopus.com/inward/record.url?scp=85179076443&partnerID=8YFLogxK
U2 - 10.1016/j.frl.2023.104813
DO - 10.1016/j.frl.2023.104813
M3 - Article
SN - 1544-6123
VL - 59
JO - Finance Research Letters
JF - Finance Research Letters
M1 - 104813
ER -