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Title: Industry expertise, information leakage and the choice of M&A advisors
Authors: Chang, Xin
Shekhar, Chander
Tam, Lewis H. K.
Yao, Jiaquan
Keywords: G24
advisory fees
advisory services
industry expertise
investment banking
mergers and acquisitions
Issue Date: 2016
Source: Chang, X., Shekhar, C., Tam, L. H. K.,& Yao, J. (2016). Industry Expertise, Information Leakage and the Choice of M&A Advisors. Journal of Business Finance & Accounting, 43(1-2), 191-225.
Series/Report no.: Journal of Business Finance & Accounting
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.
ISSN: 0306-686X
DOI: 10.1111/jbfa.12165
Schools: Nanyang Business School 
Rights: © 2016 John Wiley & Sons Ltd. This is the author created version of a work that has been peer reviewed and accepted for publication by Journal of Business Finance & Accounting, John Wiley & Sons Ltd. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [].
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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