Finance Cluster Seminar: The Effects of Investment Bank Rankings: Evidence from M&A League Tables
This paper explores how league tables, which are rankings based on market shares, influence the M&A market. A bank’s league table rank predicts its future deal flow, above and beyond other determinants of this future deal flow. This creates incentives for banks to manage their league table ranks. League table management tools include selling fairness opinions and reducing fees. Banks use such tools mostly when their incentives to do so are high: when a transaction affects their league table position or when they lost ranks in recent league tables. League table management seems to affect the quality of M&A transactions.
Professor Derrien obtained his PhD from HEC Paris in 2002. He then spent 5 years as an assistant professor at the Rotman School of Management, University of Toronto. He returned to HEC Paris in 2007, first as an associate professor, and since 2010 as a full professor. His research focuses on corporate finance, and his areas of interest include initial public offerings, the behavior of security analysts, the role of financial intermediaries, and the impact of investor horizon on firm policies. Professor Derrien's work has appeared in finance journals like the Journal of Finance, the Review of Financial Studies and the Journal of Financial Economics. See more at http://www.hec.edu/Faculty-Research/Faculty-Directory/DERRIEN-Francois