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Strategic alliances, by providing access to a partner's unique resources, enhance a firm's market value. However, the market value gained from alliances is not equally distributed among participants. This disparity is attributed to the differential levels of resources and capabilities each participant brings into the alliance. Stakeholder management is one of the critical resources and capabilities that positively affect a firm's market values. Thus, a participant with lower stakeholder management capabilities (SMC) in strategic alliances is often valued higher in the market due to its greater potential for appropriation and spillover benefits. Conversely, a participant with higher SMC is valued lower because it has less potential benefit compared to the partner and might face value erosion due to its partner's poor stakeholder management practices. Furthermore, since SMC is positively related to a firm's legitimacy and reputation, the differential SMC level between the participants in an alliance leads to a more sensitive market response in the salient institutional environment. This study aims to address these issues by using an event study method with global alliance data. The study concludes that as differential SMC between alliance participants increases, the differential market response increases in the opposite direction, with this relationship strengthened in the institutional environment, particularly where regulatory and cognitive pressures are high. [ABSTRACT FROM AUTHOR]