Market Reactions to Joint Venture Announcements in Europe: Evidence from the Post-2020 Period

Sammanfattning

This thesis examines how financial markets react to joint venture announcements with a European operational or strategic focus in the post-2020 period. Using an event-study framework, the study analyses 52 joint venture announcements and 68 firm-level observations involving publicly listed EMEA firms between March 2020 and April 2026. Abnormal returns are estimated using the market model with the STOXX Europe 600 as the benchmark, and cumulative abnormal returns are tested across several short event windows.The results show positive and statistically significant cumulative abnormal returns in the main event window, covering two trading days before the announcement through one trading day after, at the firm level, with similar evidence at joint venture level. The evidence is strongest in short windows around the announcement date, suggesting that the positive market reaction is captured over a narrow announcement-period window. This indicates that investors generally perceive joint venture announcements as value-relevant, consistent with theories emphasizing resource complementarities, risk sharing, and strategic flexibility. Firm-level regressions indicate that smaller firms experience stronger percentage abnormal returns, suggesting these mechanisms may be proportionally more important for smaller firms.The study extends joint venture event-study evidence to a recent European setting marked by heightened economic and geopolitical uncertainty.