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Environmental Jolts and Strategic Alliances in the Aftermath of the 9/11 Terrorist Attacks

Track: Policy and Strategy

Keywords: Environmental Jolts, Strategic Alliances, Slack, Terrorism

This study extends the research on jolts by adding the impact of geographical proximity and its impact on the use of alliances. We predict firms closer to a jolt based on their perception of risk exhibit a stronger response than firms farther away. Using data on alliances prior and after the 9/11 attacks, we found that there was a decrease in alliance activity in aftermath of attacks and this decrease was significantly smaller for US based firms relative to non US firms. Our study contributes by illustrating that a heightened perception of risk increases the organizational capacity to withstand threats.

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