Market Value Impact of Joint Ventures: The Effect of Industry Information-Processing Load

Previous studies of the market value impact of announcements of joint ventures have not considered industry effects. It is suggested that the impact of such announcements varies with the information-processing load associated with analyzing events in the relevant industry. An event study analysis based on a stratified sample of 108 announcements in 3 industry groups, one with a light, one with a moderate, and one with a heavy information-processing load, confirms this hypothesis. The implications for a signaling perspective on joint venture announcements are examined