published_or_final_version / Business Administration / Master / Master of Business Administration

The purpose of the study is to empirically investigate the effect of international joint venture formation on shareholder wealth. The period under investigation was from 1972 to 1987. Based on the theoretical and empirical researches done in this area, several hypotheses were tested. The statistical significance of the capital market reation to the joint venture formations was examined by using the standard event study methodology. The Ordinary Least Squares method was used to estimate the coefficients of each firm's market model parameters. The results, in general, support the wealth effect of international joint venture formation. The capital market seems to react to the unexpected information of the international joint venture formation announcements. There is evidence to indicate that international joint ventures will provide firms' shareholders with positive net present values.