Managerial rights, use of investment banks, and the wealth effects for acquiring firms' shareholders

    Authors

    W. S. Wang;A. M. Whyte

    Comments

    Authors: contact us about adding a copy of your work at STARS@ucf.edu

    Abbreviated Journal Title

    J. Bank Financ.

    Keywords

    Investment banking; Mergers and acquisitions; Shareholder rights; Wealth; effects; Managerial rights; INITIAL PUBLIC OFFERINGS; CORPORATE GOVERNANCE; FINANCIAL; INTERMEDIATION; UNDERWRITER REPUTATION; STOCKHOLDER WEALTH; EMPIRICAL-ANALYSIS; WEAK INSTRUMENTS; CEO COMPENSATION; STOCK RETURNS; PERFORMANCE; Business, Finance; Economics

    Abstract

    We examine the relation between managerial rights in acquiring firms and the decision to use an investment bank in merger and acquisition deals, and explore whether this relation impacts the wealth effects for acquiring firms' shareholders. We find that acquiring firms whose managers have relatively strong rights are more likely to use investment banks to facilitate deals and are more likely to use reputable banks. The wealth effects to acquiring firms are inversely related to the use of investment banks when managerial rights are relatively strong. However, the wealth loss is mitigated when acquiring firms use reputable investment banks. (C) 2009 Elsevier B.V. All rights reserved.

    Journal Title

    Journal of Banking & Finance

    Volume

    34

    Issue/Number

    1

    Publication Date

    1-1-2010

    Document Type

    Article

    Language

    English

    First Page

    44

    Last Page

    54

    WOS Identifier

    WOS:000272113900005

    ISSN

    0378-4266

    Share

    COinS