The role of investment banker directors in M&A |
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| Authors: | Qianqian Huang Feng Jiang Erik Lie Ke Yang |
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| Institution: | 1. College of Business, City University of Hong Kong, Kowloon Tong, Hong Kong;2. School of Management, The State University of New York, Buffalo, NY 14260, USA;3. Tippie College of Business, University of Iowa, Iowa City, IA 52242, USA;4. College of Business and Economics, Lehigh University, Bethlehem, PA 18015, USA |
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| Abstract: | We examine how directors with investment banking experience affect firms? acquisition behavior. We find that firms with investment bankers on the board have a higher probability of making acquisitions. Furthermore, acquirers with investment banker directors experience higher announcement returns, pay lower takeover premiums and advisory fees, and exhibit superior long-run performance. Overall, our results suggest that directors with investment banking experience help firms make better acquisitions, both by identifying suitable targets and by reducing the cost of the deals. |
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| Keywords: | G24 G34 |
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