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The Effects of Investment Bank Rankings: Evidence from M&A League Tables

Author

Listed:
  • François Derrien
  • Olivier Dessaint

Abstract

This paper explores how league tables, which are rankings based on market shares, influence the mergers and acquisitions market. A bank’s league table rank predicts its future deal flow, above and beyond other determinants. This creates incentives for banks to manage their league table ranks. League table management tools include selling fairness opinions (FOs) and reducing fees. Banks use such tools mostly when their incentives to do so are high: when a transaction affects their league table position or when they lost ranks in recent league tables. League table management seems to affect the quality of FOs.

Suggested Citation

  • François Derrien & Olivier Dessaint, 2018. "The Effects of Investment Bank Rankings: Evidence from M&A League Tables," Review of Finance, European Finance Association, vol. 22(4), pages 1375-1411.
    • Handle: RePEc:oup:revfin:v:22:y:2018:i:4:p:1375-1411.
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    File URL: http://hdl.handle.net/10.1093/rof/rfx056
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    Citations

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    Cited by:

    1. Feng, Yun & Liu, Chelsea & Yawson, Alfred, 2023. "Economic shocks, M&A advisors, and industry takeover activity," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    2. Stolowy, Hervé & Paugam, Luc & Gendron, Yves, 2022. "Competing for narrative authority in capital markets: Activist short sellers vs. financial analysts," Accounting, Organizations and Society, Elsevier, vol. 100(C).
    3. Malmendier, Ulrike M. & Karsten, Christel & Sautner, Zacharias, 2020. "Lawyer Expertise and Contract Design – Evidence from M&A Negotiations," CEPR Discussion Papers 14936, C.E.P.R. Discussion Papers.
    4. Carbó-Valverde, Santiago & Cuadros-Solas, Pedro J. & Rodríguez-Fernández, Francisco, 2021. "Non-pricing drivers of underwriters’ market shares in corporate bond markets," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 671-693.
    5. Marcelo Daniel Araújo Ermel & Roy Martelanc, 2018. "Motivations and Consequences of Advisor Participation in Mergers and Acquisitions," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 22(6), pages 859-884.

    More about this item

    Keywords

    League tables; Investment banking; Mergers and acquisitions;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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