Post by Sapphire Capital on Oct 24, 2008 19:06:36 GMT 4
Advisor Skill and Acquisition Performance: Do Investment Bankers Make a Difference?
Mine Ertugrul
University of Toledo
Karthik Krishnan
Northeastern University
September 1, 2008
Abstract:
Using a hand-collected dataset of investment banker turnovers between 1996 and 2003, we analyze the impact of investment bankers on acquisition outcomes. We find that investment bankers have a statistically and economically significant impact on announcement period returns, operating performance, and the long horizon stock returns of the acquirer. Investment bankers also have a significant impact on deal completion time. We also find that bankers that complete deals faster are associated with better performing deals. Bankers with Ivy League graduate degrees, multiple industry expertise, and higher levels of experience have a positive impact on the performance, completion time, and completion probability of the deals that they advise. In addition, firms with better corporate governance are more likely to be associated with bankers that have higher deal performance and faster completion time fixed effects. Finally, we also find that investment bankers are associated with various deal characteristics. Our results suggest that the investment banker skill may be an important attribute for clients seeking deal advice.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1283738_code390440.pdf?abstractid=1283738&mirid=2
Mine Ertugrul
University of Toledo
Karthik Krishnan
Northeastern University
September 1, 2008
Abstract:
Using a hand-collected dataset of investment banker turnovers between 1996 and 2003, we analyze the impact of investment bankers on acquisition outcomes. We find that investment bankers have a statistically and economically significant impact on announcement period returns, operating performance, and the long horizon stock returns of the acquirer. Investment bankers also have a significant impact on deal completion time. We also find that bankers that complete deals faster are associated with better performing deals. Bankers with Ivy League graduate degrees, multiple industry expertise, and higher levels of experience have a positive impact on the performance, completion time, and completion probability of the deals that they advise. In addition, firms with better corporate governance are more likely to be associated with bankers that have higher deal performance and faster completion time fixed effects. Finally, we also find that investment bankers are associated with various deal characteristics. Our results suggest that the investment banker skill may be an important attribute for clients seeking deal advice.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1283738_code390440.pdf?abstractid=1283738&mirid=2