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The role of investment banks on the impact of firm performance in mergers and acquisitions: evidence from the Asia-Pacific market

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  • Kai-Shi Chuang

    (Tunghai University)

Abstract

This study uses a comprehensive sample of 5271 bidders during the period of 1995–2011 to examine the role of financial advisors on the outcomes of mergers and acquisitions in the Asia Pacific market. The results indicate that bidders take more time to complete deals when hiring tier-3 advisors. In addition, the empirical evidence indicates that bidders obtain higher announcement returns when hiring low reputation financial advisors. The results are robust when controlling for year effects, country effects and self-selection bias. In addition, the regression analysis also reveals that bidders obtain lower post-announcement returns when hiring tier-1 advisors in domestic deals. Thus, the empirical findings illustrate the importance of the quality of financial advisors on firm performance in mergers and acquisitions in the Asia Pacific market.

Suggested Citation

  • Kai-Shi Chuang, 2017. "The role of investment banks on the impact of firm performance in mergers and acquisitions: evidence from the Asia-Pacific market," Review of Quantitative Finance and Accounting, Springer, vol. 48(3), pages 677-699, April.
    • Handle: RePEc:kap:rqfnac:v:48:y:2017:i:3:d:10.1007_s11156-016-0564-2
    DOI: 10.1007/s11156-016-0564-2
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    Cited by:

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    2. Yasser Alhenawi & Martha L. Stilwell, 2019. "Toward a complete definition of relatedness in merger and acquisition transactions," Review of Quantitative Finance and Accounting, Springer, vol. 53(2), pages 351-396, August.
    3. Huma Javaid & Xavier Castaner & Panos Desyllas & Orietta Marsili, 2023. "To acquire or not to acquire? Duration of due diligence in technology acquisitions," MIOIR Working Paper Series 2023-02, The Manchester Institute of Innovation Research (MIoIR), The University of Manchester.
    4. Barros, Victor & Verga Matos, Pedro & Miranda Sarmento, Joaquim & Rino Vieira, Pedro, 2022. "M&A activity as a driver for better ESG performance," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    5. Deepak Kumar & Keya Sengupta & Mousumi Bhattacharya, 2023. "M&A Negotiations: Role of Negotiation Process, Ownership and Advisors on Deal Completion," Group Decision and Negotiation, Springer, vol. 32(5), pages 1083-1115, October.
    6. Ahmed, Rizwan & Chen, Yawen & Benjasak, Chonlakan & Gregoriou, Andros & Nahar Falah Alrwashdeh, Nusiebeh & Than, Ei Thuzar, 2023. "The performance of bidding companies in merger and acquisition deals: An empirical study of domestic acquisitions in Hong Kong and Mainland China," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 168-180.

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    More about this item

    Keywords

    Mergers and acquisitions; Investment banks; Announcement returns;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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