Abstract
Strategic alliance is critical to firm growth and performance. In this paper, we use the event study methodology to examine investor reactions to firm announcements of strategic alliances. A sample of 140 strategic alliance announcements during 1996 and 2000 in Taiwan was obtained. Our findings show that announcements of strategic alliances had a positive effect on firm valuation. More specifically, such effect was only significant for small firms. The results also show evidence of information leakage before the alliance announcements.