This paper addresses the issue of inter-organizational information sharing alliances and their impacts on firm values from the perspective of inter-organizational coordination between partners in the airline industry setting. We investigate the shareholder wealth effects of inter-organizational information-sharing alliance arrangements, using 131 code-sharing agreements in the airline industry during 1984-1997. Employing event study methodology we found that the information sharing alliances between similar partners did create positive value in terms of stock returns at the time of alliance announcements to major US airlines. However, alliances between dissimilar partners resulted in significant losses of shareholder value to the major airlines. These results strongly support our main hypotheses that information-sharing alliances are successful and the benefits of such alliances are realized only when the coordination difficulties can be effectively dealt with.
This paper is a study of competitive and cooperative interactions among members of a competitive industry group. There are few strategic, tactical or market moves that do not affect competition in any industry. Competitive and cooperative interactions among competitive firms are studied to determine how the reactions of competitors to an initiator of an action cause convergent or divergent patterns. It is hypothesized that the patterns, or cycles, of competitive and cooperative interactions are a function of complexity of the interaction cycle, degree of offensiveness of participants’ moves, action reversibility, previous interaction experience, interaction cycle visibility and response time. An empirical test of the hypothesis revealed that the two most strongly supported hypotheses were: interaction cycle complexity increases the likelihood of interaction cycle convergence, and interaction cycle visibility increases the likelihood of interaction cycle divergence.
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