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The role of equity underwriting relationships in mergers and acquisitions

Author

Listed:
  • Chen, Hsuan-Chi
  • Ho, Keng-Yu
  • Weng, Pei-Shih
  • Yeh, Chia-Wei

Abstract

We examine the role of equity underwriting relationships in subsequent mergers and acquisitions (M&As). Firms, either the bidders or targets, tend to choose their M&A advisors with prior equity underwriting relationships. Consistent with the cost-saving hypothesis, retaining their prior underwriters as future advisors is related to cost reduction in the M&A advisory. Firms also experience shorter deal duration if they hire relationship advisors. This study contributes to the further understanding of how firms derive value from investment bank relationships.

Suggested Citation

  • Chen, Hsuan-Chi & Ho, Keng-Yu & Weng, Pei-Shih & Yeh, Chia-Wei, 2020. "The role of equity underwriting relationships in mergers and acquisitions," Pacific-Basin Finance Journal, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:pacfin:v:64:y:2020:i:c:s0927538x20306739
    DOI: 10.1016/j.pacfin.2020.101461
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    More about this item

    Keywords

    Underwriting; Financial advisor; Merger and acquisition;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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