The Impacts of Interbank Connections: Evidence from Mergers and Acquisitions

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Abstract

The paper identifies the difference between connected and unconnected deals and examines the impact of the interbank connections among M&A deals. Deals with connected advisors are generally more complex and larger than the ones without. In addition, target valuation is significantly higher for deals with connected advisors than the ones without. However, the completion rate is generally indifferent between the two types of deals, but the completion time is typically shorter for the deals with connected advisors. Moreover, targets' announcement returns are significantly positive when connected advisors are hired. Overall, it appears that interbank connections benefit the target firms.

Original languageAmerican English
JournalJournal of Accounting and Finance
Volume17
StatePublished - Dec 1 2017

Disciplines

  • Business

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