Over the past 25 years, the Spanish banking industry has faced significant changes stemming from deregulation, competition and innovative practices. Strategic alliances have proliferated as major banks have sought to internationalise and medium/smaller players to expand scope to defend their markets. But who do these banks choose to partner with, for what purposes – and with what outcomes?
Measuring abnormal returns on the day of announcement, the authors examine nearly 500 alliances to compare market judgements on alliances where partners and the alliance business are in the same sector; where partners are, but the alliance is not; and where partners are not, but the alliance is.
Considering relatedness between partners, and between partners and alliance business, and then between these two factors ‘crossed’ together, the authors report the first formulation as being the best received, with relatedness between focal partner and alliance activity sector being key: expansion is a safer bet than diversification. All alliance formulations can create shareholder value – but the less relatedness there is in the mix, the more management care will be needed.

SPS members receive Long Range Planning six times a year (worth £120 pa).
Non-members can buy and download individual articles at Science Direct.

« Back