Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

4-2024

Abstract

M&A advisor banks are privy to valuable and sensitive information through their service. I examine whether M&A advisor banks exploit such private information to trade in peers of M&A firms. I provide evidence that M&A advisor banks gain higher profits through their trading in peers of M&A firms, compared with non-advisor banks. Such informed trading is more intensive for M&A deals with larger impacts on peer firms (i.e., when the deal value is more significant for peer firms; when the M&A firms have larger market share in the industry; and when the stock price reactions of peer firms are stronger). Further analysis reveals that prior business relationships with peer firms enable M&A advisor banks to engage in such informed trading. In addition, M&A advisor banks’ performance pressure incentivizes them to utilize private M&A information for trading, while reputation concern deters such informed trading in peer firms.

Keywords

M&A, advisor bank, informed trading, peer firm, private information

Degree Awarded

PhD in Accounting

Discipline

Accounting

Supervisor(s)

ZHANG, Liandong

First Page

1

Last Page

58

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

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Included in

Accounting Commons

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