The Geography of Financial Advisors and Acquirer Returns

摘要：

Using cross-border mergers and acquisitions as a testing ground, we provide evidence that the geographic proximity of acquirer financial advisors to targets affects their ability to mitigate the information asymmetry faced by bidders in acquisitions. We find that when transactions are associated with greater information asymmetry, cross-border acquirers are more likely to retain the service of investment banks from target home countries, i.e., local advisors. Having a local advisor reduces the propensity of acquirers to use stock as the payment method, and the time to completion of an acquisition is also shorter when acquirers are assisted by local advisors. Most importantly, acquirers with local advisors experience significantly higher announcement-period abnormal returns than those without. These results are consistent with the hypothesis that local advisors possess an information advantage that enables them to help acquirers avoid overpaying and facilitate the transaction process.

作者: Zhiyong Dong Cong Wang Fei Xie

作者单位: School of Economics,Beijing University Faculty of Business Administration,Chinese University of Hong Kong School of Management,George Mason University

会议类型: 国际会议

会议名称: 2008年中国金融国际年会

会议地点: 大连

会议语种:英文

页码: 1-36

在线出版日期: 2008-07-02（万方平台首次上网日期，不代表论文的发表时间）