This paper investigates value creation from cross-border alliances when multinational enterprises from emerging economies (EMNEs) ally with those from developed economies (DMNEs). Based on an event study of 1096 cross-border alliances from 1994 to 2013, our results indicate that EMNEs derive long-term value from such alliances. We find that cultural distance is negatively associated with the value creation in view of the differences between emerging and developed economies. Our results show that the higher the EMNE's ex-ante risk level (e.g., R&D, corporate, and strategic risks), the greater the value creation will be for them. Further, the stock market particularly rewards EMNEs for allying with DMNEs when their ex-ante risk level is high and the cultural distance between the home and host economies is high. This study presents a more complete picture of the drivers of EMNEs' alliance strategies and contributes to the literature of global business strategy and cross-border alliance.
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