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. We suggest 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 three industry groups, one with a light, one with a moderate, and one with a heavy information-processing load (the last category included the steel industry), confirmed this hypothesis. We examine implications for a signaling perspective on joint venture announcements.