Abstract
This paper examines the role of firms’ access to bank finance in mergers and acquisitions. We find robust evidence that greater access to bank finance increases the probability that firms become targets in acquisitions. The acquirers associated with this result are small and private firms which benefit from obtaining greater access to finance via M&A. For acquisitions of targets with greater access to bank finance, we confirm that target return premiums are higher, acquirers have better post-merger operating and stock performance, and combined-firm leverage is higher. These results reveal that targets, not just acquirers, contribute to financing efficiencies in M&A.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
