Abstract
Using a novel dataset that links individual investment bankers to acquisition deals that they advise, we find that individual investment bankers indeed have a significant impact on the performance of the deals that they advise, over and above the effect of the investment bank. First, we show that investment banker fixed effects are significantly associated with acquisition performance. Second, we find that investment bankers' prior deal experience is significantly and positively related to acquisition CAR and post-acquisition operating performance. Third, using graduation year stock market performance as an instrument for bankers' career prospects, we show that the positive relation between investment banker experience and CAR (and post-acquisition operating performance) is causal. Finally, we find that, when more experienced investment bankers switch to a new bank, acquirers are more likely to move with them. Overall, our results suggest that an important source of the value to acquirers of using investment bank advisors is the skill and ability of the individual investment bankers working on the deal.
Published Version
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 call