Industry Expertise, Information Leakage and the Choice of M&A Advisors
Chang,Xin1,2; Shekhar,Chander3; Tam,Lewis H.K.4; Yao,Jiaquan5
2016
Source PublicationJournal of Business Finance and Accounting
ABS Journal Level3
ISSN14685957 0306686X
Volume43Issue:1-2Pages:191-225
Abstract

This paper examines the impacts of M&A advisors' industry expertise on firms' choice of advisors in mergers and acquisitions. We show that an investment bank's expertise in merger parties' industries increases its likelihood of being chosen as an advisor, especially when the acquisition is more complex, and when a firm in M&A has less information about the merger counterparty. However, due to the concerns about information leakage to industry rivals through M&A advisors, acquirers are reluctant to share advisors with rival firms in the same industry, and they are more likely to switch to new advisors if their former advisors have advisory relationship with their industry rivals. In addition, we document that advisors with more industry expertise earn higher advisory fees and increase the likelihood of deal completion.

KeywordAdvisory Fees Advisory Services Industry Expertise Investment Banking Mergers And Acquisitions
DOI10.1111/jbfa.12165
URLView the original
Indexed BySSCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectBusiness, Finance
WOS IDWOS:000373199300007
Fulltext Access
Citation statistics
Cited Times [WOS]:8   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionDEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding AuthorYao,Jiaquan
Affiliation1.Cambridge Judge Business School of the University of Cambridge,Nanyang Business School of Nanyang Technological University,,Taiwan
2.Jilin University of Finance and Economics,Central University of Finance and Economics,,China
3.Department of Finance,Faculty of Economics and Commerce,University of Melbourne,,Australia
4.Department of Finance and Business Economics,Faculty of Business Administration,University of Macau,,Macao
5.Wang Yanan Institute for Studies in Economics and School of Economics,Xiamen University,,China
Recommended Citation
GB/T 7714
Chang,Xin,Shekhar,Chander,Tam,Lewis H.K.,et al. Industry Expertise, Information Leakage and the Choice of M&A Advisors[J]. Journal of Business Finance and Accounting,2016,43(1-2):191-225.
APA Chang,Xin,Shekhar,Chander,Tam,Lewis H.K.,&Yao,Jiaquan.(2016).Industry Expertise, Information Leakage and the Choice of M&A Advisors.Journal of Business Finance and Accounting,43(1-2),191-225.
MLA Chang,Xin,et al."Industry Expertise, Information Leakage and the Choice of M&A Advisors".Journal of Business Finance and Accounting 43.1-2(2016):191-225.
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