Journal article
When Do Banks Listen to Their Analysts? Evidence from Mergers and Acquisitions
The Review of financial studies, v 24(2), pp 321-357
01 Feb 2011
Abstract
We examine the conflicts of interest and the flow of information between divisions of financial institutions. Using data on analyst recommendations and stockholdings of investment banks advising acquirers in mergers, we find evidence that information from investment banking flows to other divisions of the bank. Specifically, following a merger announcement, changes in a bank's stockholdings of the acquirer are positively associated with changes in recommendations by its analyst. This relationship, however, does not exist before the merger announcement. Additional tests show that the relationship between stockholdings and recommendations following a merger announcement is strongest when conflicts of interest for analysts are likely the smallest. (JEL G24, G34)
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Details
- Title
- When Do Banks Listen to Their Analysts? Evidence from Mergers and Acquisitions
- Creators
- David Haushalter - Pennsylvania State UniversityMichelle Lowry - Pennsylvania State University
- Publication Details
- The Review of financial studies, v 24(2), pp 321-357
- Publisher
- Oxford Univ Press
- Number of pages
- 37
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000287008400001
- Scopus ID
- 2-s2.0-79251497402
- Other Identifier
- 991021881500004721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Web of Science research areas
- Business, Finance
- Economics