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INVESTMENT BANK EXPERTISE IN CROSS‐BORDER MERGERS AND ACQUISITIONS
Author(s) -
Arena Matteo P.,
Dewally Michaël
Publication year - 2017
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/jfir.12118
Subject(s) - endogeneity , bidding , mergers and acquisitions , investment (military) , business , investment banking , sample (material) , industrial organization , finance , monetary economics , economics , marketing , econometrics , chemistry , chromatography , law , politics , political science
We study the influence of country expertise of investment banks in facilitating cross‐border merger deals by analyzing a large international sample of merger and acquisition (M&A) deals. We provide evidence that the geographical proximity, cultural affinity, and local experience of investment banks advising bidding firms on cross‐border M&A deals significantly increase the probability of completion of the deal, significantly decrease the time required to complete the deal, and significantly increase the operating performance of the acquiring firm after the deal. Our results are robust to firm, deal, country‐specific factors, and endogeneity concerns.