This study examines the importance of corporate multinationalism and organizational learning in explaining the wealth effects of international joint ventures announcements in Taiwan. The evidence indicates that firms announcing international joint ventures into countries with no prior operational activity experience significantly favorable market response. In contrast, prior experience in international joint ventures does not explain the cross-sectional difference of announcement period abnormal returns. These findings remain the same even after controlling other explanatory variables. The evidence supports the positive multinational network hypothesis, but is inconsistent with organizational learning hypothesis.
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