Stockholder Benefits from Japanese-U.S. Joint Ventures

We examine the impact of joint ventures between industrial companies located in Japan and the U.S. on their stockholders' wealth. Consistent with previous evidence, stockholders of both Japanese and U.S. companies earn significant positive abnormal returns, on average. Further results show that joint ventures in which the Japanese company is the larger partner have greater stockholders' gains, and that the joint venture partner's currency strength is a significant determinant of the stockholders' gains.