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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/26631

Title: The Role of Bank Advisors in Mergers and Acquisitions
Authors: Allen, Linda
Jagtiani, Julapa
Saunders, Anthony
Keywords: Relationship banking
investment bank advisors
commercial bank advisors
certification effect,
conflict of interest effect
mergers
acquisitions
Issue Date: May-2000
Series/Report no.: FIN-00-007
Abstract: This paper looks at the role of commercial banks and investment banks as financial advisors. Unlike some areas of investment banking, commercial banks have always been allowed to compete directly with traditional investment banks in this area. In their role as lenders and advisors, banks can be viewed as serving a certification function. However, banks acting as both lenders and advisors face a potential conflict of interest that may mitigate or offset any certification effect. Overall, it is found that, in their merger and acquisition advisory function, the certification effect of commercial banks dominates the conflict of interest effect and that the certification effect is particularly strong when the target’s own bank advises merger targets.
URI: http://hdl.handle.net/2451/26631
Appears in Collections:Finance Working Papers

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