Extant research posits that mergers and acquisition (M&As) do not create value. Still many firms adopt expansion strategies such as alliances, joint ventures (JVs), and M&As to grow and enhance their performance. Through performing a meta-analysis on 204 papers that assess the relationship between the three most prevalent expansion strategies formed by firms, alliances, JVs, and M&As and their different substantive and symbolic performance effects, this study contributes in two ways. First, it becomes clear that alliances and M&As enhance a firm’s substantive performance, while no positive performance effect is observed for JVs. In turn, all three expansion strategies boost a firm’s symbolic performance in terms of its legitimacy and status. Second, a distinction between their effects on a firm’s substantive performance in terms of their market-based and accounting-based performance shows that alliances and M&As both positively contribute to a firm’s accounting-based performance, while only the former spurs a firm’s market-based returns. This indicates that M&As have more long-term accounting-based performance effects compared to alliances and JVs, which suggests that in the long-term firms do best by expanding through M&As.
Previous versions of this article were presented at the 2011 Academy of Management Annual Meeting in San Antonio, United States; the 2011 Strategic Management Society Annual International Conference in Miami, United States; and at a research seminar at the VU University Amsterdam, The Netherlands. I would like to thank Tom Elfring, Paul Vlaar, and Pursey Heugens for commenting on earlier versions of this paper, as this has greatly helped me improve my work. I am solely responsible for any remaining errors.
Drees, J.M. (2014), "(Dis)Aggregating Alliance, Joint Venture, and Merger and Acquisition Performance: A Meta-Analysis", Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 13), Emerald Group Publishing Limited, Bingley, pp. 1-24. https://doi.org/10.1108/S1479-361X20140000013001
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