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Relational configurations with information intermediaries: The effect of firm‐investment bank ties on expected acquisition performance
Author(s) -
Sleptsov Alexander,
Anand Jaideep,
Vasudeva Gurneeta
Publication year - 2013
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.2065
Subject(s) - intermediary , competition (biology) , business , investment (military) , affect (linguistics) , industrial organization , investment banking , monetary economics , microeconomics , marketing , finance , economics , ecology , linguistics , philosophy , politics , political science , law , biology
Recognizing information‐related problems in acquisition transactions, we study how the characteristics of acquiring firms' relationships with information brokers or intermediaries like investment banks affect firms' access to acquisition‐related information, thus influencing expected acquisition performance. We propose that relational configurations that enhance the intermediaries' ability and willingness provide the most beneficial and appropriate information to acquiring firms. We find that acquirers' expected acquisition performance increases with the number of prior transactions with investment banks but decreases when relationships with banks become exclusive. Further, the positive effect of number of prior transactions becomes even stronger for less related acquisitions. Our study provides insights on the beneficial performance implications of competition in multiple but nonexclusive relationships with information intermediaries such as investment banks . Copyright © 2013 John Wiley & Sons, Ltd.