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Top-tier advisors and the market feedback dynamics in cross-border M&As

Samer Adra, Malika Hamadi, Jiayi Yuan

International Review of Financial Analysis, Volume: 86, Start page: 102495

Swansea University Author: Jiayi Yuan

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DOI (Published version): 10.1016/j.irfa.2023.102495

Abstract

We provide evidence that the presence of top-tier advisors increases managers' propensity to withdraw from cross-border mergers and acquisitions (CBAs) with poor market returns around the announcement. This effect is stronger for private target acquisitions, in which information asymmetry is ex...

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Published in: International Review of Financial Analysis
ISSN: 1057-5219
Published: Elsevier BV 2023
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URI: https://cronfa.swan.ac.uk/Record/cronfa62932
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first_indexed 2023-03-14T17:06:01Z
last_indexed 2023-03-28T03:21:07Z
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spelling v2 62932 2023-03-14 Top-tier advisors and the market feedback dynamics in cross-border M&amp;As cadc0d0c1ad9c8c76270fed4d9b48a60 Jiayi Yuan Jiayi Yuan true false 2023-03-14 BAF We provide evidence that the presence of top-tier advisors increases managers' propensity to withdraw from cross-border mergers and acquisitions (CBAs) with poor market returns around the announcement. This effect is stronger for private target acquisitions, in which information asymmetry is expected to be more pronounced, and smaller bidders, who are likely to lack the expertise required to process information themselves. This suggests that managers assisted by reputable investment banks consider negative market feedback in informationally challenging deals. Our results are robust to several endogeneity tests. We provide novel inferences about the informative role of stock markets in shaping advisory roles in respect of M&As. Journal Article International Review of Financial Analysis 86 102495 Elsevier BV 1057-5219 Top-tier advisors; Market feedback; Cross-border mergers and acquisitions; Deal cancellation 1 3 2023 2023-03-01 10.1016/j.irfa.2023.102495 http://dx.doi.org/10.1016/j.irfa.2023.102495 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University SU Library paid the OA fee (TA Institutional Deal) 2023-06-23T14:56:40.4956830 2023-03-14T17:03:17.6055664 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Samer Adra 1 Malika Hamadi 2 Jiayi Yuan 3 62932__26937__e503885d2f7345099926ccdb994519db.pdf 62932.VOR.pdf 2023-03-27T15:02:21.1703159 Output 646539 application/pdf Version of Record true Distributed under the terms of a CC BY-NC-ND license. true eng https://creativecommons.org/licenses/by-nc-nd/4.0/
title Top-tier advisors and the market feedback dynamics in cross-border M&amp;As
spellingShingle Top-tier advisors and the market feedback dynamics in cross-border M&amp;As
Jiayi Yuan
title_short Top-tier advisors and the market feedback dynamics in cross-border M&amp;As
title_full Top-tier advisors and the market feedback dynamics in cross-border M&amp;As
title_fullStr Top-tier advisors and the market feedback dynamics in cross-border M&amp;As
title_full_unstemmed Top-tier advisors and the market feedback dynamics in cross-border M&amp;As
title_sort Top-tier advisors and the market feedback dynamics in cross-border M&amp;As
author_id_str_mv cadc0d0c1ad9c8c76270fed4d9b48a60
author_id_fullname_str_mv cadc0d0c1ad9c8c76270fed4d9b48a60_***_Jiayi Yuan
author Jiayi Yuan
author2 Samer Adra
Malika Hamadi
Jiayi Yuan
format Journal article
container_title International Review of Financial Analysis
container_volume 86
container_start_page 102495
publishDate 2023
institution Swansea University
issn 1057-5219
doi_str_mv 10.1016/j.irfa.2023.102495
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
url http://dx.doi.org/10.1016/j.irfa.2023.102495
document_store_str 1
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description We provide evidence that the presence of top-tier advisors increases managers' propensity to withdraw from cross-border mergers and acquisitions (CBAs) with poor market returns around the announcement. This effect is stronger for private target acquisitions, in which information asymmetry is expected to be more pronounced, and smaller bidders, who are likely to lack the expertise required to process information themselves. This suggests that managers assisted by reputable investment banks consider negative market feedback in informationally challenging deals. Our results are robust to several endogeneity tests. We provide novel inferences about the informative role of stock markets in shaping advisory roles in respect of M&As.
published_date 2023-03-01T14:56:35Z
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score 11.012678

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